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ADMINISTRATIVE CASE LAW UPDATE

BRYCE BENJET Hull Henricks & MacRae 221 W. 6th Street, #2000

Austin, TX 78701 512-494-4554

AMANDA TAYLOR

DAVID DUBOSE ALESSANDRA BEAVERS

Third Court of Appeals P.O. Box 12547

Austin, TX 78711

State Bar of Texas 18TH ANNUAL ADVANCED

ADMINISTRATIVE LAW COURSE September 28 – 29, 2006

Austin

CHAPTER 7

Bryce Benjet is an associate with the law firm Hull Henricks & MacRae. Mr. Benjet previously served as a staff attorney at the Third Court of Appeals. Before joining the court, he was a staff attorney at the Texas Defender Service. Mr. Benjet graduated from the University of Texas School of Law in 1998 and received his undergraduate degree from Brandeis University in 1995. Amanda Taylor has worked at the Third Court of Appeals in Austin since 2004, beginning as a law clerk and now serving as a staff attorney for Chief Justice Law. Before joining the court, Amanda obtained her J.D., cum laude, from Baylor Law School and her B.A. in political science and sociology, cum laude, from Vanderbilt University. David DuBose is the staff attorney for Justice Alan Waldrop. After graduating from the University of Texas at Austin with degrees in journalism and law, he has served as a briefing attorney in Corpus Christi at the federal district court for Judge Hayden W. Head, Jr. and at the state court of appeals for Justices Noah Kennedy and Nelda Rodriguez. Alessandra Beavers is the staff attorney for Justice David Puryear of the Third Court of Appeals. She graduated from the University of Colorado and the University of Houston Law Center, after which she served as a briefing attorney for Justice Michol O’Connor at the First Court of Appeals in Houston and an assistant attorney general.

Administrative Case Law Update Chapter 7

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TABLE OF CONTENTS

INTRODUCTION .......................................................................................................................................................... 1

I. AGENCY AUTHORITY........................................................................................................................................ 1 AT&T Communications, L.P. v. Southwestern Bell Tel. Co., 186 S.W.3d 517 (Tex. 2006) ................................... 1 CenterPoint Energy Entex v. Railroad Comm’n, No. 03-04-00731-CV, 2006 Tex. App. LEXIS 5882 (Tex. App.—Austin July 7, 2006, no pet. h.) (op. on reh’g)............................................................................................. 1 Austin Chevrolet, Inc. v. Motor Vehicle Bd., No. 03-05-00355-CV, 2006 Tex. App. LEXIS 4972 (Tex. App.—Austin June 9, 2006, no pet. h.) (mot. for reh’g pending) ....................................................................................... 1 Edwards Aquifer Auth. v. Chemical Lime, Ltd., No. 03-04-00379-CV, 2006 Tex. App. LEXIS 4745 (Tex. App.—Austin June 2, 2006, no pet. h.) (mot. for reh’g pending) ........................................................................... 2 Edwards Aquifer Auth. v. Peavy Ranch, No. 04-05-00412-CV, 2006 Tex. App. LEXIS 1390 (Tex. App.—San Antonio Feb. 22, 2006, no pet.)............................................................................................................................... 2 Mid-Century Ins. Co. v. Texas Workers’ Comp. Comm’n, 187 S.W.3d 754 (Tex. App.—Austin 2006, no pet.) .. 2 Cummins v. Travis County Water Control & Improvement Dist. No. 17, 175 S.W.3d 34 (Tex. App.—Austin 2005, pet. denied) (op. on reh’g) ............................................................................................................................. 2

II. JURISDICTION & VENUE ................................................................................................................................... 3 Thomas v. Long, No. 03-0204, 2006 Tex. LEXIS 280 (Tex. Apr. 26, 2006)......................................................... 3 Sweeney v. Jefferson, No. 03-04-00223-CV, 2006 Tex. App. LEXIS 6703 (Tex. App.—Austin July 28, 2006, no pet. h.)...................................................................................................................................................................... 3 City of Anson v. Harper, No. 11-05-00398-CV, 2006 Tex. App. LEXIS 6055 (Tex. App.—Eastland July 13, 2006, no pet. h.)....................................................................................................................................................... 3 Nueces County Bail Bond Bd. v. Alkek, No. 13-04-00395-CV, 2006 Tex. App. LEXIS 5834 (Tex. App.—Corpus Christi July 6, 2006, no pet. h.) (mem. op.)............................................................................................................. 3 Twenty Wings Ltd. v. Tex. Alcoholic Bev. Comm’n, No. 02-05-00355-CV, 2006 Tex. App. LEXIS 5725 (Tex. App.—Fort Worth June 29, 2006, no pet. h.).......................................................................................................... 3 Midland Indep. Sch. Dist. v. Watley, No. 11-04-00262-CV, 2006 Tex. App. LEXIS 4499 (Tex. App.—Eastland May 25, 2006, no pet.) (op. on reh’g) ..................................................................................................................... 4 Carrington v. Texas Workforce Comm’n, No. 01-04-00424-CV, 2006 Tex. App. LEXIS 311 (Tex. App.—Houston [1st Dist.] Jan. 12, 2006, no pet.) (mem. op.) ........................................................................................... 4 City of Houston v. Houston Firefighters’ Relief & Ret. Fund, No. 01-04-00807-CV, 2006 Tex. App.—Houston [1st Dist.] May 5, 2006, mot. for ext. pet. granted)................................................................................................. 4 Flour Bluff Indep. Sch. Dist. v. R.S., No. 13-05-00623-CV, 2006 Tex. App. LEXIS 3031 (Tex. App.—Corpus Christi Apr. 13, 2006, no pet.) (mem. op.) .............................................................................................................. 4 Texas Thoroughbred Breeders Ass’n v. Donnan, No. 12-04-00129-CV, 2006 Tex. App. LEXIS 1620 (Tex. App.—Tyler Feb. 28, 2006, pet. filed).................................................................................................................... 4 Stansell v. Dallas Indep. Sch. Dist., No. 05-05-00539-CV, 183 S.W.3d 115 (Tex. App.—Dallas 2006, no pet.) . 5

III. STANDING ............................................................................................................................................................ 5 Verney v. Abbott, No. 03-05-00064-CV, 2006 Tex. App. LEXIS 6727 (Tex. App.—Austin July 28, 2006, no pet. h.) (mem. op.).......................................................................................................................................................... 5 Reed v. Prince, No. 06-05-00138-CV, 2006 Tex. App. LEXIS 4787 (Tex. App.—Texarkana June 2, 2006, pet. filed) ........................................................................................................................................................................ 5 Robinson v. Neeley, 192 S.W.3d 904 (Tex. App.—Dallas 2006, no pet.)............................................................... 6

IV. EXHAUSTION OF REMEDIES ............................................................................................................................ 6 City of College Station v. Wellborn Special Util. Dist., No. 10-04-00306-CV, 2006 Tex. App. LEXIS 6533 (Tex. App.—Waco July 26, 2006, no pet. h.) (mem. op.) ................................................................................................ 6 Westbrook v. Water Valley Indep. Sch. Dist., No. 03-04-00449-CV, 2006 Tex. App. LEXIS 3845 (Tex. App.—Austin May 5, 2006, pet. filed) (mem. op.)............................................................................................................. 6 Balli v. El Paso Indep. Sch. Dist., No. 08-04-00034-CV, 2006 Tex. App. LEXIS 1845 (Tex. App.—El Paso Mar. 9, 2006, pet. filed)........................................................................................................................................... 6 Dallas County v. Gonzales, 183 S.W.3d 94 (Tex. App.—Dallas 2006, pet. filed) (op. on reh’g) .......................... 6 McElroy v. Texas Workforce Comm’n, No. 02-05-00234-CV, 2006 Tex. App. LEXIS 836 (Tex. App.—Fort Worth Feb. 2, 2006, no pet.) (mem. op.) ................................................................................................................. 7

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DeSoto Wildwood Dev., Inc. v. City of Lewisville, 184 S.W.3d 814 (Tex. App.—Fort Worth 2006, no pet.) (op. on reh’g) .................................................................................................................................................................. 7

V. IMMUNITY............................................................................................................................................................ 7 Tooke v. City of Mexia, No. 03-0878, 2006 Tex. LEXIS 654 (Tex. June 30, 2006)............................................... 7 Columbus Indep. Sch. Dist. v. Five Oaks Achievement Ctr, No. 05-0414, 2006 Tex. LEXIS 653 (Tex. June 30, 2006) (per curiam)................................................................................................................................................... 8 Texas S. Univ. v. State St. Bank & Trust Co., No. 01-05-00758-CV, 2006 Tex. App. LEXIS 4950 (Tex. App.—Houston [1st Dist.] June 8, 2006, no pet. h.) ........................................................................................................... 8 Leo v. Trevino, No. 13-05-00516-CV, 2006 Tex. App. LEXIS 4918 (Tex. App.—Corpus Christi June 8, 2006, no pet. h.)................................................................................................................................................................. 8 State v. Precision Solar Controls, Inc., 188 S.W.3d 364 (Tex. App.—Austin Mar. 17, 2006, pet. filed) .............. 8 Cooper v. City of Dallas, No. 05-05-00102-CV, 2006 Tex. App. LEXIS 818 (Tex. App.—Dallas Feb. 1, 2006, pet. filed) (mem. op.)............................................................................................................................................... 9

VI. EVIDENTIARY SUFFICIENCY ........................................................................................................................... 9 Marsh v. State Bd. for Educator Certification, No. 03-05-00336-CV, 2006 Tex. App. LEXIS 6704 (Tex. App.—Austin July 28, 2006, no pet. h.) ............................................................................................................................. 9 Texas Alcoholic Bev. Comm’n v. I Gotcha, Inc., No. 07-05-00411-CV, 2006 Tex. App. LEXIS 6733 (Tex. App.—Amarillo July 28, 2006, no pet. h.) (mem. op.) ........................................................................................... 9 Chalifoux v. Texas State Bd. of Med. Exmr’s, No. 03-05-00320-CV, 2006 Tex. App. LEXIS 4738 (Tex. App.—Austin June 2, 2006, no pet. h.) (mem. op., mot. for ext. reh’g granted) ................................................................ 9 Larimore v. Employees Ret. Sys., No. 03-04-00220-CV, 2006 Tex. App. LEXIS 2246 (Tex. App.—Austin Mar. 24, 2006, pet. denied) (op. on reh’g) ..................................................................................................................... 10 United Indep. Sch. Dist. v. Whitehawk, No. 03-04-00662-CV, 2006 Tex. App. LEXIS 2058 (Tex. App.—Austin Mar. 17, 2006, no pet.) (mem. op.) ....................................................................................................................... 10 Parks v. Harris County Civil Serv. Comm’n, No. 08-04-00223-CV, 2006 Tex. App. LEXIS 1329 (Tex. App.—El Paso Feb. 16, 2006, no pet.).............................................................................................................................. 10 Bexar Metro. Water Dist. v. Texas Comm’n on Envtl. Quality, 185 S.W.3d 546 (Tex. App.—Austin 2006, pet. filed) (op. on reh’g) ............................................................................................................................................... 10 Palmer v. Shaw, No. 05-04-00941-CV, 2006 Tex. App. LEXIS 817 (Tex. App.—Dallas Feb. 1, 2006, mot. for ext. pet. filed) (mem. op.)...................................................................................................................................... 11

VII. INSURANCE........................................................................................................................................................ 11 Stark v. Geeslin, No. 03-05-00411-CV, 2006 Tex. App. LEXIS 5845 (Tex. App.—Austin July 7, 2006, no pet. h.) .......................................................................................................................................................................... 11 Liberty Mut. Ins. Co. v. Texas Dep’t of Ins., 187 S.W.3d 808 (Tex. App.—Austin 2006, pet. filed) ................... 11

VIII. TAX...................................................................................................................................................................... 11 Cameron Appraisal Dist. v. Rourk, No. 04-0359, 2006 Tex. LEXIS 504 (Tex. July 21, 2006) (per curiam) ...... 11 Harris County Appraisal Dist. v. Pasadena Prop., LP, No. 11-05-00013-CV, 2006 Tex. App. LEXIS 5077 (Tex. App.—Eastland June 15, 2006, no pet. h.) (mot. for ext. pet. filed) ..................................................................... 12 Aaron Rents, Inc. v. Travis Cent. Appraisal Dist., No. 03-05-00171-CV, 2006 Tex. App. LEXIS 2247 (Tex. App.—Austin Mar. 23, 2006, no pet. h.) (mem. op.) (mot. for reh’g en banc pending) ....................................... 12 Pete Dominguez Enters., Inc. v. County of Dallas, 188 S.W.3d 385 (Tex. App.—Dallas 2006, no pet.)............. 12 Jim Wells County v. El Paso Prod. Oil & Gas Co., 189 S.W.3d 861 (Tex. App.—Houston [1st Dist.] 2006, pet. denied)................................................................................................................................................................... 12 Home Interiors & Gifts, Inc. v. Strayhorn, 175 S.W.3d 856 (Tex. App.—Austin 2005, pet. filed) (op. on reh’g)............................................................................................................................................................................... 12

IX. WORKERS’ COMPENSATION.......................................................................................................................... 13 Texas Mut. Ins. Co. v. Sonic Sys. Int’l, Inc., Nos. 14-05-00111-CV, -770-CV, 2006 Tex. App. LEXIS 4901 (Tex. App.—Houston [14th Dist.] June 8, 2006, no pet. h.)........................................................................................... 13 TPCIGA v. Morrison, No. 03-05-00309-CV, 2006 Tex. App. LEXIS 4124 (Tex. App.—Austin May 12, 2006, pet. filed) ............................................................................................................................................................... 13 Newsom v. Ballinger Indep. Sch. Dist., No. 03-05-00482-CV, 2006 Tex. App. LEXIS 3520 (Tex. App.—Austin Apr. 28, 2006, no pet.) .......................................................................................................................................... 13









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Insurance Co. of the State of Penn. v. Flores, No. 14-05-00346-CV, 2006 Tex. App. LEXIS 3659 (Tex. App.—Houston [14th Dist.] Apr. 27, 2006, no pet. h.) (mot. for reh’g pending)............................................................. 14 Texas Workers’ Comp. Comm’n v. Horton, 187 S.W.3d 282 (Tex. App.—Beaumont 2006, no pet.) ................. 14

X. WORKFORCE COMPENSATION ..................................................................................................................... 14 Shioleno Indus., Inc. v. Texas Workforce Comm’n, No. 02-05-00227-CV, 2006 Tex. App. LEXIS 4556 (Tex. App.—Fort Worth May 25, 2006, no pet.) (mem. op.) ......................................................................................... 14 Mendicino v. Texas Workforce Comm’n, No. 03-05-00054-CV, 2006 Tex. App. LEXIS 4323 (Tex. App.—Austin May 19, 2006, pet. filed) (mem. op.)......................................................................................................... 14

XI. PUBLIC UTILITY COMMISSION ..................................................................................................................... 15 CenterPoint Energy Houston Elec., LLC v. Public Util. Comm’n, No. 03-05-00565-CV, 2006 Tex. App. LEXIS 4740 (Tex. App.—Austin June 2, 2006, pet. filed) ............................................................................................... 15 Double Diamond, Inc., v. Hilco Elec. Coop., Inc., No. 10-05-00264-CV, 2006 Tex. App. LEXIS 4433 (Tex. App.—Waco May 24, 2006, pet. filed)................................................................................................................. 16 ASAP Paging, Inc. v. Public Util. Comm’n, No. 03-05-00172-CV, 2006 Tex. App. LEXIS 3851 (Tex. App.—Austin May 5, 2006, no pet. h.) (mot. for reh’g pending) ..................................................................................... 16 CenterPoint Energy Entex v. Railroad Comm’n, No. 03-04-00688-CV, 2006 Tex. App. LEXIS 3518 (Tex. App.—Austin Apr. 28, 2006, no pet.) ................................................................................................................... 16 Jenkins v. Entergy Corp., 187 S.W.3d 785 (Tex. App.—Corpus Christi 2006, pet. filed) ................................... 16 Office of Pub. Util. Counsel v. Public Util. Comm’n, 185 S.W.3d 555 (Tex. App.—Austin 2006, pet. filed) (op. on reh’g) ................................................................................................................................................................ 17

XII. WATER................................................................................................................................................................. 17 City of Marshall v. City of Uncertain, No. 03-1111, 2006 Tex. LEXIS 526 (Tex. June 9, 2006) (mot. for reh’g pending)................................................................................................................................................................. 17 Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist., No. 06-05-00058-CV, 2006 Tex. App. LEXIS 6185 (Tex. App.—Texarkana July 18, 2006, no pet. h.)....................................................................................... 17 City of Seabrook v. Port of Houston Auth., No. 01-04-00925-CV, 2006 Tex. App. LEXIS 4314 (Tex. App.—Houston [1st Dist.] May 18, 2006, pet. filed) (en banc)........................................................................................ 17

XIII. MISCELLANEOUS............................................................................................................................................ 18 City of Tyler v. Beck, No. 04-0813, 2006 Tex. LEXIS 627 (Tex. June 30, 2006) (per curiam)............................ 18 Pizzitola v. Houston Indep. Sch. Dist., No. 13-05-00249-CV, 2006 Tex. App. LEXIS 4369 (Tex. App.—Corpus Christi May 18, 2006, no pet.) .............................................................................................................................. 18 City of Houston v. Jackson, 192 S.W.3d 764 (Tex. 2006) .................................................................................... 18 ConocoPhilips Co. v. Ramirez, No. 04-05-00488-CV, 2006 Tex. App. LEXIS 5710 (Tex. App.—San Antonio June 28, 2006, no pet. h.) (mem. op.).................................................................................................................... 18 Texas Dep’t of Pub. Safety v. Ricks, No. 13-04-00597-CV, 2006 Tex. App. LEXIS 5334 (Tex. App.—Corpus Christi June 22, 2006, no pet. h.) (mem. op.) ........................................................................................................ 18 Texas Dep’t of Pub. Safety v. Svoboda, 04-05-00796-CV, 2006 Tex. App. LEXIS 5266 (Tex. App.—San Antonio June 21, 2006, pet. filed) (mem. op.) ...................................................................................................... 19 Abbott v. Texas Dep’t of Mental Health & Mental Retardation, No. 03-04-00743-CV, 2006 Tex. App. LEXIS 5165 (Tex. App.—Austin June 16, 2006, no pet. h.) (mot. for reh’g pending)..................................................... 19 Jones v. Texas Dep’t of Crim. Justice-Corr. Inst. Div., No. 13-05-00197-CV, 2006 Tex. App. LEXIS 5088 (Tex. App.—Corpus Christi June 15, 2006, no pet. h.) (mem. op.)................................................................................ 19 White v. Texas Dep’t of Crim. Justice-Corr. Inst. Div., No. 13-04-00530-CV, 2006 Tex. App. LEXIS 5095 (Tex. App.—Corpus Christi June 15, 2006, no pet. h.) (mem. op.)................................................................................ 19 De Santiago v. West Tex. Cmty. Supervision & Corr. Dep’t, No. 08-05-00157-CV, 2006 Tex. App. LEXIS 4946 (Tex. App.—El Paso June 8, 2006, no pet.) .......................................................................................................... 20 Dallas County v. Hughes, 189 S.W.3d 886 (Tex. App.—Dallas 2006, pet. filed)................................................ 20 Metromedia Rest. Servs., Inc. v. Strayhorn, 188 S.W.3d 282 (Tex. App.—Austin 2006, pet. filed).................... 20 Coyel v. City of Kennedale, No. 02-04-00391-CV, 2006 Tex. App. LEXIS 83 (Tex. App.—Fort Worth Jan. 5, 2006, pet. denied) (mem. op.) ............................................................................................................................... 20








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ADMINISTRATIVE CASE LAW UPDATE Introduction The update includes selected administrative law cases from August 2005 through July 2006. This is not an exhaustive review of all administrative cases, nor do these synopses exhaustively cover all issues raised by the cases. The authors attempted to choose cases representative of issues being raised in Texas courts and to highlight the most salient points of the cited cases. The views of the authors are not to be taken as the views of their employers---particularly the justices of the court of appeals---and these views certainly should not be interpreted as predictive of the result of future cases. Special thanks to Margie Corbett, Ryan Rollans, and Patrick Pearsall for their help with this paper and presentation. I. Agency Authority Trial court’s injunction was overly broad; PUC may consider whether switched-access rates have an anti-competitive effect, but may not reduce those rates or examine their reasonableness. AT&T Communications, L.P. v. Southwestern Bell Tel. Co., 186 S.W.3d 517 (Tex. 2006). AT&T filed a complaint with the PUC, alleging that Southwestern Bell Communications Services (SBCS) was offering below-cost intrastate long-distance to Southwestern Bell Telephone (SWBT) customers, in violation of 1995 PURA amendments and the federal Telecommunications Act, which were intended to open local telephone service to competition. The PUC referred the matter to SOAH, and SWBT sued to enjoin any further proceedings, arguing that the PUC was overstepping its authority. The trial court granted summary judgment for SWBT and issued a declaratory judgment that the PUC had exceeded its authority in conducting a hearing into the validity of SWBT’s switched-access rates (fees paid by long-distance carriers to local carriers for compensation for access services). The trial court enjoined the PUC and AT&T from pursuing “any matter” related to the validity of SWBT’s switched-access rates and found that the PUC had no authority to consider AT&T’s complaints against SBCS. The court of appeals affirmed. The supreme court reversed, holding that the trial court’s declaratory judgment and injunction were too broad. The court agreed that the PUC cannot reduce switched access rates or examine their reasonableness, but said that the PUC is not barred from determining that such rates have an anticompetitive effect and “attempting to fashion an appropriate remedy with in its power.” The supreme court also held that AT&T’s

complaint that SBCS offers preference to SWBT customers is within the PUC’s authority to consider, but that AT&T’s complaints against SBCS that SBCS and SWBT have engaged in cross-subsidization are not. Railroad Commission has the statutory authority to conduct retroactive prudence reviews; such reviews are not ratemaking proceedings and therefore cities may participate, but may not recover their costs. CenterPoint Energy Entex v. Railroad Comm’n, No. 03-04-00731-CV, 2006 Tex. App. LEXIS 5882 (Tex. App.—Austin July 7, 2006, no pet. h.) (op. on reh’g). This case presented two issues: whether the Texas Railroad Commission may conduct a retroactive prudence review of charges flowed through a purchased gas adjustment clause (PGA clause) and order refunds of charges that the Commission finds the utility imprudently incurred and whether such a review is a “ratemaking proceeding” in which a participating municipality is entitled to expense reimbursement. See Tex. Util. Code Ann. § 103.022. The Court reviewed the history and purpose of PGA clauses in the context of highly regulated utility rate schedules and determined that the Commission has the implied statutory authority to conduct retroactive prudence reviews and that those reviews do not violate the filed rate doctrine or the rule against retroactive ratemaking. However, retroactive prudence review proceedings are not “ratemaking” proceedings under section 103.022. Although cities may participate in such cases before the Commission, they may not recover their costs under section 103.022. Board properly exercised discretion in choosing standards and considering issues remanded from trial court. Austin Chevrolet, Inc. v. Motor Vehicle Bd., No. 03-05-00355-CV, 2006 Tex. App. LEXIS 4972 (Tex. App.—Austin June 9, 2006, no pet. h.) (mot. for reh’g pending). Landmark Chevrolet Corporation sued General Motors Corporation and Austin Chevrolet, Inc., alleging that GM defrauded Landmark out of its right to protest Austin’s dealership application in 1993 and discriminated against Landmark in the allocation of Suburbans and Tahoes from 1994 to 1997. The district court abated the suit and referred these two issues to the Board for determination. The Board ruled for Landmark on fraud and for GM/Austin on the allocation issue. GM/Austin appealed the fraud issue, contending that the Board acted in an arbitrary and capricious manner by refusing to answer the question posed by the district court and by ignoring the Board’s precedent. Court of appeals affirms the Board’s order. The court holds that the Board did not improperly recast the issues the trial court referred to it. The court holds that the trial court did not provide



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instructions, properly deferring to the Board’s expertise. Board was not required to determine how Board sitting in 1993 would have decided issue based on evidence that would have been presented in 1993. The court also held that the evidence was sufficient to support finding that addition of new dealership to area harmed existing dealership based on sales figures and economic conditions. The court held that, to measure “adequacy of representation” as required by statute, the Board could use multiple dealer area standard (MDA), rather than the Texas average adjusted standard proposed by GM/Austin, because there was sufficient evidence that the MDA standard was more appropriate to the Houston market. The court found that the agency had not, in previous cases, committed to the exclusive use of the average adjusted standard. The court held that the Board did not act in an arbitrary and capricious manner or deny GM/Austin’s equal protection and due process rights because its use of the MDA standard did not deviate from established standards without notice. Deadline to file a historical-use application ran from date of supreme court’s Barshop mandate, not the date of judgment; therefore, Authority’s new deadline, occurring more than one month before mandate issued, was invalid, and Chemical Lime’s application was timely filed. Edwards Aquifer Auth. v. Chemical Lime, Ltd., No. 03-04-00379-CV, 2006 Tex. App. LEXIS 4745 (Tex. App.—Austin June 2, 2006, no pet. h.) (mot. for reh’g pending). The trial court found the Authority’s governing statute was unconstitutional and enjoined its enforcement. The supreme court reversed and rendered judgment that the act was constitutional, but its judgment was rendered after the original statutory deadlines for filing of historical-use applications with the Authority. The Authority created new application deadlines, making permits due on December 30, 1996, after the supreme court’s judgment but before mandate issued on February 10, 1997. A historical user of water filed an application on January 17, 1997, but the Authority found that it was late. The court of appeals held that the act—and therefore the Authority itself—became effective on the date the supreme court issued its mandate, not its judgment. Thus, by setting a filing deadline before the act was effective, the authority exceeded its statutory powers, its rule was invalid, and the water user’s declaration was timely filed as a matter of law. The court further held that the water user was a prevailing party under the UDJA, and because suit against the Authority and other water districts are allowed by chapter 36 of the water code, the water user was not barred from seeking declaratory relief, including attorney’s fees, under the UDJA. See also Edwards Aquifer Auth. v. Peavy Ranch, No. 04-05-00412-CV, 2006 Tex. App. LEXIS 1390 (Tex.

App.—San Antonio Feb. 22, 2006, no pet.) (holding that Peavy Ranch was not entitled to individualized notice of filing deadline and received all constitutionally required notice). Agency lacked the authority to amend a rule to require payment of certain disability benefits retroactively to the date of injury. Mid-Century Ins. Co. v. Texas Workers’ Comp. Comm’n, 187 S.W.3d 754 (Tex. App.—Austin 2006, no pet.). The Commission amended its rules related to lifetime income benefits (LIBs) to provide that LIBs should be paid retroactively from the original date of disability. Mid-Century filed suit for a declaration that the rule was invalid. The trial court rendered judgment in favor of the Commission, and Mid-Century appealed. The court of appeals reversed, holding that the language of the statute as a whole showed a legislative intent that LIBs should be paid when an employee becomes eligible to receive them, not dating back to an original injury that over time worsened into a severe, permanent injury. The court held that the Commission’s amended rule overstepped the Commission’s statutory authority and was therefore invalid. Travis County Water District had authority to regulate neighboring landowners’ use of District property. Cummins v. Travis County Water Control & Improvement Dist. No. 17, 175 S.W.3d 34 (Tex. App.—Austin 2005, pet. denied) (op. on reh’g). The Cumminses applied to the District for a license to build a boat dock on a part of Lake Travis controlled by the District. When the District denied the application, the Cumminses sought declaratory judgment and challenged the validity of two District regulations enacted by the District to protect restricted zones around its water intake barge. The regulations prohibited “all activity” within 200 feet of its water intake barge and “all recreational boating activity” within 1000 feet of its water intake barge. The District moved for summary judgment, which was granted by the district court. The Court of Appeals affirmed, concluding that the Cumminses are not vested with riparian rights. Likewise, the Cumminses are not vested with littoral rights because title did not originate before 1895 and because the adjacent water is an artificial lake rather than a natural body of water, so the waters are considered floodwaters. Second, the District was authorized to deny the Cumminses’ license application because, in addition to their lack of littoral rights, the Cumminses have no rights to construct a boat dock because those waters and submerged lands are state-owned trust property and are regulated by a water control and improvement district for the purpose of providing safe drinking water to the public. Third, the Cumminses’ chain of title did not convey any express easement, and the Cumminses’ behavior has





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not created an implied easement. Fourth, there was no compensable taking by the District because the 200-foot legislation was an exercise of the State’s police power that has not substantially interfered with the Cumminses’ use and enjoyment of their land. Fifth, the District’s requirement that warning signs be placed within 200 feet of the barge does not constitute inverse condemnation because it has not resulted in a permanent, physical occupation of the land. Finally, the District’s 1000-foot regulation is a valid exercise of its statutory authority. II. Jurisdiction & Venue Trial court implicitly denied sheriff’s plea to the jurisdiction and sheriff was therefore entitled to interlocutory appeal. Thomas v. Long, No. 03-0204, 2006 Tex. LEXIS 280 (Tex. Apr. 26, 2006). In a suit by a reinstated employee against the sheriff’s office, the Supreme Court held that the trial court’s ruling on the merits of some claims raised in cross-motions for summary judgment constituted an implicit denial of the sheriff’s department’s plea to the jurisdiction raised in the motion. Accordingly, interlocutory appeal was available to the sheriff’s office. The Court then held that “once the employees of a department elect to create a commission, and the commission’s rules create rights employees would not have at common law, the commission obtains exclusive jurisdiction over those matters.” Id. at *6. Because the employee failed to exhaust her remedies with the Commission, the Supreme Court dismissed for want of jurisdiction. District court had jurisdiction to consider claims related to removal of plaques from supreme court building. Sweeney v. Jefferson, No. 03-04-00223-CV, 2006 Tex. App. LEXIS 6703 (Tex. App.—Austin July 28, 2006, no pet. h.). Sweeney and the Sons of Confederate Veterans sued Chief Justice Jefferson, Rick Perry, and the executive director of the Texas Building and Procurement Commission, complaining of the removal of plaques from the lobby of the supreme court building that dedicated the building to Texas veterans who served in the Confederacy. Appellees conceded that the plaques were removed without the approval of the historical commission, notice to the public, or public hearings, in violation of government code § 2166.501. However, they argued that the district court lacked jurisdiction to remedy the violation. The trial court granted appellees’ plea to the jurisdiction and dismissed the suit. The court of appeals reversed the trial court, holding that appellees had not disproved all of Sweeney’s allegations of jurisdiction under the natural resources or government code. Sections 2166.501 and 2166.5011 of the government code do not address a

trial court’s jurisdiction to consider Sweeney’s complaints or whether a remedy is available, and so do not divest the trial court of jurisdiction. The court reversed the trial court’s dismissal and remanded the cause to the trial court. Controversy related to mineral rights under land intended to be used for a landfill was not yet ripe because no permit had issued to allow landfill’s construction, but owner of mineral rights could bring claims related to road construction and land clearing already underway; request for injunctive relief barred by sovereign immunity because it would control City or subject it to liability. City of Anson v. Harper, No. 11-05-00398-CV, 2006 Tex. App. LEXIS 6055 (Tex. App.—Eastland July 13, 2006, no pet. h.). The City purchased the surface of a piece of land to construct a landfill. After it began clearing land and constructing a road, the owner of the mineral rights sued to stop construction. The court of appeals held that there was no ripe controversy over construction of the landfill because the City had not yet obtained a permit to construct the landfill. However, there was jurisdiction to hear the mineral rights owner’s takings claims regarding damage from current construction of the road and clearing the land. The court of appeals also held that sovereign immunity barred the mineral rights owner’s claim for injunctive relief because it was “brought to control a governmental entity’s actions or to subject it to liability.” Bail bondsman’s plea for damages and injunctive relief did not strip the trial court of jurisdiction to consider appeal from denial of application. Nueces County Bail Bond Bd. v. Alkek, No. 13-04-00395-CV, 2006 Tex. App. LEXIS 5834 (Tex. App.—Corpus Christi July 6, 2006, no pet. h.) (mem. op.). A bail bondsman appealed the Board’s denial of his application. The bail bondsman also sought damages and injunctive relief. The court of appeals affirmed the denial of the Board’s plea to the jurisdiction, holding that the bail bondsman’s requests for damages and injunctive relief did not negate the trial court’s statutory jurisdiction over an appeal of the denial of an application. The court of appeals then reversed the trial court’s judgment in favor of the bail bondsman finding that his application was fatally flawed because it did not contain a proper financial statement. TABC has exclusive jurisdiction over alcoholic beverage permits and trial court thus lacks jurisdiction to order the denial of a permit. Twenty Wings Ltd. v. Tex. Alcoholic Bev. Comm’n, No. 02-05-00355-CV, 2006 Tex. App. LEXIS 5725 (Tex. App.—Fort Worth June 29, 2006, no pet. h.). The court of appeals held that the TABC has exclusive jurisdiction over mixed beverage permits. Accordingly, a trial court lacked jurisdiction to grant


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mandamus relief compelling an ALJ to deny a mixed beverage application to a bar whose application had been denied twice before. Trial court lacked jurisdiction over suit because school employee did not satisfy the Whistleblower’s Act’s requirement that she initiate grievance proceedings before filing suit. Midland Indep. Sch. Dist. v. Watley, No. 11-04-00262-CV, 2006 Tex. App. LEXIS 4499 (Tex. App.—Eastland May 25, 2006, no pet.) (op. on reh’g). Watley was fired by MISD, and she immediately filed a grievance. Several days later she was reinstated, so she withdrew her grievance. Three months later, her employment was terminated again. She did not file a grievance from the second termination notice. Watley then sued under the Whistleblower Act. MISD filed a plea to the jurisdiction, arguing that Watley did not initiate grievance procedures within 90 days of the alleged violation and thus was barred from suing under the Act. Watley argued that her first grievance “adequately initiated” grievance proceedings required by the Act. The trial court denied MISD’s plea to the jurisdiction. On interlocutory appeal, the court of appeals reversed and rendered judgment in favor of MISD. The court held that Watley did not comply with the Act’s requirement that she initiate grievance proceedings before filing suit. The court held that Watley’s first grievance did not satisfy the Act’s requirement. No common-law claim for retaliatory discharge existed. The court further held that sovereign immunity barred Watley’s claims of assault, intentional infliction of emotional distress, and misrepresentation because they are intentional torts not within the waiver of immunity. See also Carrington v. Texas Workforce Comm’n, No. 01-04-00424-CV, 2006 Tex. App. LEXIS 311 (Tex. App.—Houston [1st Dist.] Jan. 12, 2006, no pet.) (mem. op.). Trial court had jurisdiction to consider Fund’s request for declaratory judgment that City was required to contribute to Fund. City of Houston v. Houston Firefighters’ Relief & Ret. Fund, No. 01-04-00807-CV, 2006 Tex. App.—Houston [1st Dist.] May 5, 2006, mot. for ext. pet. granted). Firefighters’ Relief & Retirement Fund determined that 22 firefighters were entitled to prior service credits, contingent upon the City’s statutory contribution under former art. 6243e.2. The City rejected the firefighters’ demand for the City’s contribution, and the firefighters sued the Fund. The Fund cross-claimed against the City, seeking a declaratory judgment that the City was required to make payment under the law. The trial court granted the Fund’s motion for summary judgment and denied the City’s. The City appealed, arguing the trial court lacked jurisdiction over the case because (1) the Fund sought to impose a money judgment on the City, and (2) the

firefighters did not give notice of their intent to seek review until after the 20 days provided by statute. The City further argued that the firefighters did not timely apply for the credits or meet certain conditions precedent. The court of appeals first held that the trial court properly exercised subject matter jurisdiction over the cause because the issue concerns construction and application of the Local Firefighters Retirement Act and did not result in the trial court’s rendering of a money judgment against the City. The court further held that the Fund was entitled to waive or modify the 20-day period in which the firefighters were required to provide their notices of appeal and that the City was not entitled to complain about the Fund’s extension of that time period. Further, the Fund did not bring a statutory appeal under the Act, but rather an action for declaratory relief under the UDJA. Finally, the court held that the Fund has broad jurisdiction to determine the propriety of the firefighters’ claims, and the City has no authority to challenge the Fund’s decision. Cheerleader could not appeal from her placement in alternative education program, but district’s issues related to TRO in cheerleader’s favor were moot. Flour Bluff Indep. Sch. Dist. v. R.S., No. 13-05-00623-CV, 2006 Tex. App. LEXIS 3031 (Tex. App.—Corpus Christi Apr. 13, 2006, no pet.) (mem. op.). Cheerleader was discovered to have controlled substance in her possession and was placed in FBISD’s alternative education program, which required her to resign from the cheerleading squad for the 2005-2006 school year. She filed suit and in August 2005 obtained a TRO and then a temporary injunction compelling FBISD to place her back on the cheerleading squad. The trial court denied FBISD’s plea to the jurisdiction, and the court of appeals reversed. The court held that “judicial review is precluded under these circumstances” because the education code provides that a student’s assignment to an alternative education program is final and may not be appealed beyond the school board. The court further held that the temporary injunction was moot because it only affected the 2005-2006 school year, which ended while the interlocutory appeal was pending. The court opined, however, that judicial intervention in cases related to extracurricular activities wasted judicial resources and “often [did] more harm than good,” and that a case such as this “should be dismissed ‘as asinine on its face.’” Under doctrine of judicial noninterference, trial court lacked jurisdiction over dispute between horse-breeders’ association and horse-owner. Texas Thoroughbred Breeders Ass’n v. Donnan, No. 12-04-00129-CV, 2006 Tex. App. LEXIS 1620 (Tex. App.—Tyler Feb. 28, 2006, pet. filed). Donnan owned a horse that he sought to have accredited as a Texas-bred thoroughbred. Although the horse’s


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accreditation status was not yet decided, Donnan entered it in several races that it won. Other owners complained, and the Association held a hearing on the horse’s status, during which the Association suspended Donnan’s license and disqualified the horse. Donnan appealed to SOAH, and the ALJ recommended that the Association’s decisions be upheld, although it modified Donnan’s suspension to 60 days, rather than a year. Donnan sought judicial review of the ALJ’s decision. Donnan also filed suit in a different county, seeking a permanent injunction and alleging slander, libel, and negligence. The trial court found in favor of Donnan, awarding him $100,000 for negligence, $75,000 for defamation, and $75,000 for gross negligence. The court also issued a permanent injunction ordering the Association to reaccredit the horse. The court of appeals reversed, holding that the doctrine of judicial noninterference stripped the trial court of jurisdiction over Donnan’s suit. Under the doctrine, courts will not interfere with internal management issues of a voluntary association, provided the association does not “substitute legislation for interpretation,” “overstep the bounds of reason or violate public policy” or state law. The court held that the dispute between the Association and Donnan should be left to the Association. Hearings examiner lacked jurisdiction to review school district’s termination of a probationary contract, and therefore the Commissioner of Education also lacked jurisdiction over the issue. Stansell v. Dallas Indep. Sch. Dist., No. 05-05-00539-CV, 183 S.W.3d 115 (Tex. App.—Dallas 2006, no pet.). Stansell’s probationary contract was terminated by DISD because he did not obtain a teaching certificate by a certain date. He appealed, and the hearing examiner found for DISD, concluding that his failure to timely obtain the certificate constituted good cause for his termination. The examiner recommended that DISD uphold the termination decision, and the board of trustees adopted the examiner’s recommendation. Stansell appealed to the Commissioner of Education, who concluded she lacked jurisdiction and dismissed the appeal. Stansell filed suit, and the trial court affirmed the Commissioner’s decision. The court of appeals affirmed, holding that under section 21.251(b)(1) of the education code, the hearings examiner lacked jurisdiction over Stansell’s claim that his probationary contract was wrongfully terminated. Therefore, the Commissioner was correct in determining that she lacked jurisdiction. The court also held that because Stansell did not argue before the Commissioner that DISD failed to give him 45-days’ notice of his termination as required by statute, the Commissioner did not err in refusing to consider that argument.

III. Standing Taxpayer lacked standing to complain of AG’s entry into contracts because there was no justiciable controversy and because outside counsel had fully performed under one of the contracts. Verney v. Abbott, No. 03-05-00064-CV, 2006 Tex. App. LEXIS 6727 (Tex. App.—Austin July 28, 2006, no pet. h.) (mem. op.). In December 2003, the AG entered into (1) contract for outside counsel and (2) interagency cooperation contract between the AG and the lottery commission; the outside counsel contract expired in about September 2003. In December 2004, Verney sued, complaining of the AG’s decision to enter into those contracts. In January 2005, the AG terminated the interagency contract, under which no payments were ever made by the lottery commission to the AG. The trial court granted the AG’s plea to the jurisdiction; the court of appeals affirmed. A taxpayer generally has standing to challenge the illegal expenditure of public funds, but may not seek to recover funds already expended or challenge expenditures that are merely “unwise or indiscreet.” In this case, Verney lacked standing to bring his suit under Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547 (Tex. 2000). Under the outside counsel contract, the attorney had completed the contemplated legal services and the AG “must simply pay for it,” and under the interagency contract, the AG had performed its duties and the commission had to pay under that contract. Further, the outside counsel contract had already expired under its own terms and interagency contract was terminated shortly after Verney filed suit, so the issue was moot and there was no longer a justiciable controversy. Finally, the AG’s use of state employees related to the underlying contracts and to defending the suit was not an illegal expenditure—the AG may spend employee time defending the claims “regardless of the merits of Verney’s allegations.” Litigant lacked standing to sue Appraisal District and Sheriff’s Department. Reed v. Prince, No. 06-05-00138-CV, 2006 Tex. App. LEXIS 4787 (Tex. App.—Texarkana June 2, 2006, pet. filed). Reed sued the Bowie County Appraisal District and ten officers of the sheriff’s department, alleging they had neglected to uphold the law. The district court granted the District’s and the sheriff’s department’s pleas to the jurisdiction based on sovereign immunity. The court of appeals affirmed, holding that Reed lacked standing to bring a quo warranto action seeking the removal of the sheriff from public office; the Tort Claims Act provided government immunity against Reed’s negligence claims against the sheriff’s department and did not waive immunity as to Reed’s claim that the Appraisal District negligently collected and allocated taxes; and in any event, Reed failed to exhaust his administrative remedies regarding his tax claims.




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Appellants lacked standing to challenge action of education commissioner. Robinson v. Neeley, 192 S.W.3d 904 (Tex. App.—Dallas 2006, no pet.). Appellants sued Commissioner of Education Neeley, seeking declaratory and injunctive relief from her decision to appoint a board of managers to control the Wilmer-Hutchins ISD. The appellate court affirmed the trial court’s grant of Neeley’s plea to the jurisdiction based on a lack of standing of appellants, who were: former employees of the district, a trustee-elect to the school board, a taxpayer, and voters. There was no standing because (1) appellants did not bring the action through a quo warranto proceeding under CPRC § 66.001(1), and (2) the former employees could not establish direct injury, the trustee could not establish that the challenged actions blocked him from taking oath and assuming his position, the taxpayer could not establish the illegal expenditure of funds, and the voters could not establish any injury distinct from the public at large. IV. Exhaustion of Remedies TCEQ has exclusive jurisdiction over the issues underlying the City’s lawsuit, and therefore the City must exhaust its administrative remedies before bringing suit. City of College Station v. Wellborn Special Util. Dist., No. 10-04-00306-CV, 2006 Tex. App. LEXIS 6533 (Tex. App.—Waco July 26, 2006, no pet. h.) (mem. op.). After the City annexed land within the District’s area to provide water services, the District sought a cease and desist order from TCEQ. While that application was pending, the City filed suit against the District, which filed a plea to the jurisdiction. The trial court granted the plea, and the court of appeals affirmed, holding that TCEQ has exclusive jurisdiction over water and sewer rates, operations, and services, and that the City’s claims all rely on a determination that the District must allow the City to provide water service in the District’s area, a “determination of a service that can only be made by” TCEQ. Because TCEQ has exclusive jurisdiction over the underlying issue, the City must exhaust its administrative remedies before filing suit. Former employee of school district exhausted her administrative remedies when she “dual-filed” her complaint with the EEOC and the TCHR. Westbrook v. Water Valley Indep. Sch. Dist., No. 03-04-00449-CV, 2006 Tex. App. LEXIS 3845 (Tex. App.—Austin May 5, 2006, pet. filed) (mem. op.). Westbrook worked for WVISD and in 2001 was terminated. She filed a complaint with the EEOC, claiming her firing was gender- and age-related. She asked that her claim be “dual-filed” with the TCHR, and the EEOC transmitted it to the TCHR, which issued a right-to-sue letter. Westbrook sued WVISD, which filed a motion arguing that Westbrook had not

exhausted her administrative remedies before the TCHR. The trial court granted WVISD’s motion and dismissed the suit, and Westbrook appealed. The court of appeals held that Westbrook had exhausted her remedies by dual-filing her EEOC complaint with the TCHR, which was “designed to work alongside the EEOC” in a worksharing agreement intended to make both agencies more efficient. Westbrook was not required to show that the TCHR actually investigated her complaint, only that she filed it, allowed 180 days for the TCHR to dismiss or resolve her claim, and produced a right-to-sue letter. Employees showed that they exhausted their administrative remedies by filing their complaints with the EEOC, which then forwarded the complaints to the state agency. Balli v. El Paso Indep. Sch. Dist., No. 08-04-00034-CV, 2006 Tex. App. LEXIS 1845 (Tex. App.—El Paso Mar. 9, 2006, pet. filed). Appellants, EPISD employees, sued EPISD, alleging sex discrimination, retaliation, and hostile work environment. EPISD filed a plea to the jurisdiction, arguing that appellants had not exhausted their administrative remedies under the Texas Commission on Human Rights Act because they had not filed complaints with the Commission on Human Rights within 180 days of the discriminatory acts. The trial court dismissed the suit. The court of appeals reversed and remanded, holding that appellants had exhausted their administrative remedies. The court held that appellants “nominally” filed their complaints with the Commission by filing complaints with the EEOC, the Commission’s designated agent for receiving such complaints, in which they named the Commission as the state agency to receive the complaints. The court held that there was strong evidence that the EEOC transmitted the complaints, but that the Commission never received them. Aggrieved employees are required only to show that they timely filed their complaints, not to prove that the Commission actually received them. County was not entitled to dismissal for want of jurisdiction where it did not prove that it had no liability under the Whistleblower Act. It was, however, entitled to dismissal in second cause, in which Gonzales failed to exhaust his administrative remedies. Dallas County v. Gonzales, 183 S.W.3d 94 (Tex. App.—Dallas 2006, pet. filed) (op. on reh’g). Court of appeals considered two consolidated appeals. In one case, after Gonzales was fired by Constable Castillo, he filed a grievance asserting that he was terminated in retaliation for reporting Castillo’s unlawful activities. After a hearing, he was reinstated. Gonzales then sued Castillo and the County in federal court, asserting federal claims and a claim under the Texas Whistleblower Act. The federal court





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dismissed the suit without prejudice to Gonzales filing his claims under the Texas Whistleblower Act in state court. Gonzales then filed the same causes of action, including the federal claims, in state court. The trial court granted summary judgment for the County on the federal claims, but denied it as to the Whistleblower claim. The court denied the County’s plea to the jurisdiction, which argued that the County was immune from suit, and the County appealed. The court of appeals affirmed the denial of the plea in the first suit, holding that the County had not shown its entitlement to judgment as a matter of law on the Whistleblower claim. The Act waives immunity from suit and liability, and because the County did not show that it was not liable under the Act, the trial court properly denied the plea to the jurisdiction. In the second case, after he returned to work after his first termination, Gonzales sought workers’ compensation benefits after he injured his back and was unable to return to work. In the meantime, Constable Dupree was elected in place of Constable Castillo. Dupree believed he was not obligated to rehire deputy constables whose terms had ended, and he decided not to rehire certain deputies, including Gonzales, because he did not have “full faith and confidence” in them. Dupree also said he did not rehire Gonzales because he learned that Gonzales had been terminated for exceeding his authorized leave time. Gonzales and others filed grievances, seeking reinstatement, which the Civil Service Commission denied. Gonzales sued Dupree and the County, for the first time alleging that he was fired for filing a workers’ compensation claim. The defendants filed a plea to the jurisdiction, which the trial court denied. The court of appeals reversed the trial court’s denial of the plea to the jurisdiction in the second suit. The court held that Gonzales did not exhaust his administrative remedies because his grievance did not assert anti-retaliation claims. The court further held that Gonzales’s first amendment retaliation claims were based only on matters of Gonzales’s personal interest, not public concern, and that Gonzales had no constitutionally protected property interest in his position. Finally, the court held that Dupree was protected by official immunity because his decision to rehire deputy constables was a discretionary function made in good faith. Fourteen-day window to appeal denial of unemployment benefits is jurisdictional, and failure to timely appeal is a failure to exhaust administrative remedies. McElroy v. Texas Workforce Comm’n, No. 02-05-00234-CV, 2006 Tex. App. LEXIS 836 (Tex. App.—Fort Worth Feb. 2, 2006, no pet.) (mem. op.). McElroy sough unemployment benefits and was denied. He did not appeal to TWC’s appeal tribunal within two weeks

and instead waited about seven months to appeal. TWC ruled that the denials became final two weeks after they were mailed because McElroy did not appeal within that time period. McElroy filed suit, and TWC filed a plea to the jurisdiction. The trial court dismissed the suit, and the court of appeals affirmed. The court held that the 14-day deadline to appeal a benefits decision is jurisdictional because a failure to appeal within that window is a failure to exhaust administrative remedies. The court concluded that a party cannot obtain judicial review unless he has exhausted his administrative remedies. Former property owner lacked standing to seek refund of impact fees, but was entitled to abatement to exhaust its administrative remedies, rather than dismissal of its breach of contract and governmental takings claims. DeSoto Wildwood Dev., Inc. v. City of Lewisville, 184 S.W.3d 814 (Tex. App.—Fort Worth 2006, no pet.) (op. on reh’g). In 1993, DeSoto and the City agreed that DeSoto would pay $133,000 for roadway construction in a new development. The agreement left the time for the construction to the City’s sole discretion, but allowed DeSoto to construct the improvements itself and then seek a refund of the escrowed funds. In 2001, DeSoto demanded that the City return the funds, and the City refused. DeSoto sued for a refund of “impact fees” under chapter 395 of the government code, breach of contract, a governmental taking, and a return of fees because they were excessive. The trial court granted the City’s plea to the jurisdiction. The court of appeals held that the fees were impact fees, but that DeSoto lacked standing to seek their return because DeSoto no longer owned any of the property in the development and because DeSoto had not shown that its claim fell within chapter 395. The court further held that the City waived immunity from liability by entering into the contract and that immunity from suit was waived by section 51.075 of the local government code, which provides that a municipality may plead and be impleaded. The court held that DeSoto had not exhausted its administrative remedies, but held that DeSoto was entitled to an abatement of its contract and takings claims to cure its failure to exhaust. V. Immunity Phrase “plead or be impleaded” does not by itself waive sovereign immunity. Tooke v. City of Mexia, No. 03-0878, 2006 Tex. LEXIS 654 (Tex. June 30, 2006). In this case, a municipality had contracted with a brush removal service. In response to the brush removal service’s breach of contract suit, the municipality raised sovereign immunity. The brush removal service alleged that language in the local government code allowing the municipality to “plead or be impleaded” constituted a waiver of sovereign



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immunity. Reversing prior authority, the Supreme Court disagreed. See id. at *9. The Court explained:

Scores of Texas statutes provide, variously, that individuals and entities, public and private, may “sue and (or) be sued”, “(im)plead and (or) be impleaded”, “be impleaded”, “prosecute and defend”, “defend or be defended”, “answer and be answered”, “complain and (or) defend”, or some combination of these phrases, in court. The phrases are also used in municipal charters and ordinances and in corporate articles and bylaws. Read in context, they sometimes waive governmental immunity from suit, sometimes do not, and sometimes have nothing whatever to do with immunity, referring instead to the capacity to sue and be sued or the manner in which suit can be had (for example, by service on specified persons). Because immunity is waived only by clear and unambiguous language, and because the import of these phrases cannot be ascertained apart from the context in which they occur, we hold that they do not, in and of themselves, waive immunity from suit.

Contract provision did not waive school district’s sovereign immunity. Columbus Indep. Sch. Dist. v. Five Oaks Achievement Ctr, No. 05-0414, 2006 Tex. LEXIS 653 (Tex. June 30, 2006) (per curiam). The Supreme Court held that a provision in a contract with a special education provider stating that “any recourse to judicial action under this contract shall be in the courts” was not a clear and unambiguous waiver of a school district’s sovereign immunity. Following its decision in Tooke, the Court also held that section 11.151(a) of the education code did not waive sovereign immunity. However, the Court noted that the legislature had amended the local government code to permit some contract suits against school districts. Accordingly, the Court remanded the case to the trial court for further proceedings. State university waived sovereign immunity as to contract claims by engaging in conduct sufficient to meet the “waiver by conduct” exception. Texas S. Univ. v. State St. Bank & Trust Co., No. 01-05-00758-CV, 2006 Tex. App. LEXIS 4950 (Tex. App.—Houston [1st Dist.] June 8, 2006, no pet. h.). TSU entered a contract to pay Viron over $13.5 million to perform six “energy savings” projects and Bank financed the contract. TSU did not make any required payments and had not received authorization to enter into the contract. Bank and Viron sued TSU for alleged “defaults,” and TSU filed a plea to the

jurisdiction, claiming sovereign immunity. The trial court denied TSU’s plea, and the majority of the court of appeals affirmed the court’s denial regarding Viron’s contract-based claims but reversed the denial regarding declaratory judgment and inverse condemnation claims, as follows. The court recognized that the State does not waive immunity from breach-of-contract suit merely by accepting the benefits of a contract, but held that “waiver by conduct exception” should apply due to “extraordinary factual circumstances” presented by this case, in which TSU had made no payments and had “lured” Viron into the contract, later claiming that the contract was invalid. However, the declaratory judgment claims were expressly outside the court’s subject-matter jurisdiction under TNRCC v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002), and although the Bank and Viron had standing to claim inverse condemnation, they did not allege sufficient facts to establish TSU’s requisite intent under constitutional-takings law. Justice Keyes filed a concurring and dissenting opinion agreeing with the majority’s “waiver by conduct” analysis, but opining that the Bank and Viron properly plead inverse condemnation and because sovereign immunity does not protect against such a claim, it was unnecessary to reach waiver issue. Teachers had qualified immunity in suit based on student’s drowning on field trip. Leo v. Trevino, No. 13-05-00516-CV, 2006 Tex. App. LEXIS 4918 (Tex. App.—Corpus Christi June 8, 2006, no pet. h.). Parents of student who drowned during school field trip to swimming pool sued supervising teachers. Trial court denied teachers’ summary-judgment motion based on qualified immunity. Court of appeals reversed, holding that conclusive evidence showed that teachers acted in discretionary capacity when supervising the pool. The court held that, despite mandatory attendance laws, school did not have custodial special relationship with public school student because it did not provide for child’s basic needs. The court held that the teachers did not act with deliberate indifference toward child’s safety so as to strip them of qualified immunity. The court rendered judgment that the teachers were immune from suit in their individual capacities. By filing suit, State waives immunity from suit against germane counterclaims. State v. Precision Solar Controls, Inc., 188 S.W.3d 364 (Tex. App.—Austin Mar. 17, 2006, pet. filed). The State sued Precision Solar for breach of contract, breach of warranty, and quantum meruit, alleging that traffic signals made and sold by Precision Solar were defective. Precision Solar counterclaimed for business disparagement, alleging that the State had wrongfully communicated statewide that Precision Solar’s products were defective. The State filed a plea




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to the jurisdiction, asserting that the counterclaim was barred by sovereign immunity. The trial court denied the plea, and the State took an interlocutory appeal. The court of appeals affirmed the trial court’s denial, holding that by filing suit against Precision Solar, the State waived immunity against counterclaims arising out of, incident to, or connected with the State’s claims. The court relied on the supreme court’s decision in Reata Construction Corp. v. City of Dallas, No. 02-1031 (Tex. Apr. 2, 2004) (pending on reh’g). The court refused to overrule its past precedent holding that a litigant may seek affirmative relief through its counterclaims, and declined to limit allowable counterclaims to the same cause of action asserted by the State. The court held that Precision Solar’s counterclaims, which arise out of the same facts and center on whether the signals were defective, were germane to the State’s asserted claims. City did not waive its sovereign immunity by conduct or by language included in its charter that it may sue or be sued. Cooper v. City of Dallas, No. 05-05-00102-CV, 2006 Tex. App. LEXIS 818 (Tex. App.—Dallas Feb. 1, 2006, pet. filed) (mem. op.). Cooper was denied a promotion and filed a grievance alleging racial and sex discrimination. She also sought disclosure of certain examinations records under the Public Information Act. The City denied her open records request. The City also sought a determination of the issue from the Attorney General and, after receiving the AG’s decision, appealed the ruling in a separate suit. Cooper filed a declaratory judgment action. The City filed a plea to the jurisdiction, and the trial court granted the plea and dismissed the suit. The court of appeals affirmed, holding that the City was immune from suit. The court disagreed with Cooper’s argument that the City’s immunity was waived under the government code provision stating that a home-rule municipality “may plead and be impleaded” and by language in the City’s charter stating that the City may “sue and be sued.” The court also held that the City had not waived its immunity by its conduct in challenging her discovery request in the grievance process and in appealing the AG’s ruling to the trial court. Finally, the court held that the UDJA does not extend jurisdiction for a matter over which the trial court otherwise lacks jurisdiction. VI. Evidentiary Sufficiency Substantial evidence supported the Board’s order revoking teaching certificate due to sexual assault committed in 1979. Marsh v. State Bd. for Educator Certification, No. 03-05-00336-CV, 2006 Tex. App. LEXIS 6704 (Tex. App.—Austin July 28, 2006, no pet. h.). Marsh argued that the trial court erred in affirming the Board’s order revoking his

teaching certificate. He asserted that the Board denied him substantive due process by: (1) arbitrarily determining that his 1979 sexual assault of his minor stepdaughter made him currently “unworthy to instruct the youth of Texas,” and (2) improperly shifting the burden of proof to him to show his rehabilitation at the hearing, instead of following its own rule stating that the Board had the burden of proving his “unworthiness.” Alternatively, Marsh argued that, if the burden-shifting was appropriate, the Board denied him procedural due process by failing to give him notice that he would bear the burden of proving his rehabilitation at the hearing. Concluding that the mere passage of time did not diminish the relevance of Marsh’s behavior to an evaluation of his fitness as an educator, the Court ruled that substantial evidence supported the Board’s determination of his unworthiness to instruct Texas youth. The Court also ruled that, after the Board proved its prima facie case to the ALJ, the burden properly shifted to Marsh to rebut the Board’s evidence. Additionally, the Court determined that Marsh’s complaint that he was not given notice that the burden would shift to him to prove his rehabilitation was not supported by the record. Substantial evidence supported ALJ’s findings that topless dancer engaged in vulgar or lewd conduct sufficient to justify suspension of alcoholic beverage permit or imposition of a fine. Texas Alcoholic Bev. Comm’n v. I Gotcha, Inc., No. 07-05-00411-CV, 2006 Tex. App. LEXIS 6733 (Tex. App.—Amarillo July 28, 2006, no pet. h.) (mem. op.). TABC adopted ALJ’s proposed decision recommending that I Gotcha pay a $1,500 fine in lieu of having its permit suspended for ten days. The trial court reversed, finding the order was not supported by substantial evidence. The court of appeals held that substantial evidence supported the ALJ’s findings that one of I Gotcha’s dancers engaged in “lewd conduct” and could be characterized as “vulgar entertainment” so as to violate the Alcoholic Beverage Code. The court reversed the trial court and rendered judgment reinstating the ALJ’s PFD and the TABC’s order. Medical license was properly revoked; Doctor’s due process rights were not violated, substantial evidence supported decision, and conclusions were not arbitrary or capricious. Chalifoux v. Texas State Bd. of Med. Exmr’s, No. 03-05-00320-CV, 2006 Tex. App. LEXIS 4738 (Tex. App.—Austin June 2, 2006, no pet. h.) (mem. op., mot. for ext. reh’g granted). The Board filed a complaint against Chalifoux, alleging he had rendered unacceptable care to 13 patients. Following a SOAH hearing, the Board revoked Chalifoux’s medical license, the district court affirmed, and Chalifoux appealed, claiming the Board violated his due process rights and that the order was arbitrary and capricious


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and not supported by substantial evidence. The court of appeals affirmed, holding that each of the challenged findings was supported by substantial evidence; the Board’s pleadings sufficiently put Chalifoux on notice of the Board’s claims; and the Board correctly interpreted occupations code §§ 164.051(a)(6) and 164.052(a)(5). Additionally, the court held Chalifoux’s due process rights were not violated when the same two doctors participated on the temporary suspension panel and the later Board review; Chalifoux failed to demonstrate that the doctors’ prior participation caused their “minds to be irrevocably closed to the matters at issue in the Board’s final order” so as to overcome the presumption that they were unbiased. There was no evidence to show the Board had engaged in ex parte communications, and the Board’s actions were neither arbitrary nor capricious. Substantial evidence supported ERS’s decision to deny benefits. Larimore v. Employees Ret. Sys., No. 03-04-00220-CV, 2006 Tex. App. LEXIS 2246 (Tex. App.—Austin Mar. 24, 2006, pet. denied) (op. on reh’g). After Larimore slipped at work and injured his back, he sought disability benefits. ERS denied his application on grounds that ERS could not determine that Larimore’s injury directly resulted from a specific occurrence. Larimore appealed, and the ALJ recommended that Larimore be granted benefits. ERS decline to adopt the ALJ’s proposal, instead adopting alternative findings and conclusions prepared by ERS staff and determining that Larimore had not proved that his fall at work was the primary cause of his disability. The trial court affirmed ERS’s decision, and Larimore appealed. The court of appeals affirmed, holding that substantial evidence supported ERS’s decision and that Larimore was not denied due process by ERS’s actions. The court noted that there was competing evidence about whether Larimore had a pre-existing condition that caused the disability and held that ERS did not abuse its discretion in determining that the ALJ’s proposal was against the weight of the evidence. Commissioner’s decision was supported by substantial evidence and was not arbitrary and capricious. United Indep. Sch. Dist. v. Whitehawk, No. 03-04-00662-CV, 2006 Tex. App. LEXIS 2058 (Tex. App.—Austin Mar. 17, 2006, no pet.) (mem. op.). Whitehawk filed a grievance asserting that UISD had violated its own policy by reducing its monthly contributions to her insurance premiums. The Commissioner of Education denied Whitehawk’s grievance, but the trial court reversed, finding that the Commissioner’s decision was arbitrary and capricious and not supported by substantial evidence. The court of appeals reversed, holding that Whitehawk did not

meet her burden of showing that the Commissioner’s decision was not supported by substantial evidence. The court further held that the Commissioner’s decision was not arbitrary or capricious, noting that Whitehawk did not assert that she was denied due process. Sheriff’s Department employee did not have the right to choose the doctor who would conduct the required psychological exam, and doctor’s report provided substantial evidence to support employee’s termination. Parks v. Harris County Civil Serv. Comm’n, No. 08-04-00223-CV, 2006 Tex. App. LEXIS 1329 (Tex. App.—El Paso Feb. 16, 2006, no pet.). Parks was fired by the Harris County Sheriff’s Department for unprofessional conduct. He appealed, and the Commission determined that the termination should be overturned and Parks reinstated. His reinstatement, however, was contingent on a successful completion of the Department’s “return to duty testing,” including a psychological exam. The Department ordered Parks to undergo testing by a psychiatrist of the Department’s choosing. Parks failed that exam. He took another exam with a doctor of his choosing and passed. The Department again terminated Parks’s employment, and he appealed. The commission upheld the Department’s decision, and Parks sought judicial review, arguing that the Commission went beyond its authority in making its ruling. The trial court granted the Department’s motion for summary judgment, upheld the Commission’s decision, and dismissed Parks’s suit. The court of appeals affirmed, holding that there was substantial evidence to support the Commission’s decision and that the Commission acted within its authority in considering the Department’s doctor’s report. The court held that the Department’s policy does not give Parks the right to choose his own examiner, and that the Department’s doctor’s report provided substantial evidence for the Commission’s decision to uphold Parks’s termination. TCEQ’s permitting decision in favor of City’s application to contract with river authority was supported by substantial evidence. Bexar Metro. Water Dist. v. Texas Comm’n on Envtl. Quality, 185 S.W.3d 546 (Tex. App.—Austin 2006, pet. filed) (op. on reh’g). City sought to contract with GBRA to join a water supply project. BexarMet, a nearby water conservation district, applied to provide water service to an overlapping area. An ALJ found that granting the City/GBRA certificate would have a positive effect on the City, that the City proposed the most reliable water source, and that the certificate would satisfy statutory requirements. Despite those findings, the ALJ recommended that the City/GBRA application be denied and that BexarMet’s be partially granted. The Commission disagreed with the ALJ on “the threshold question of whether [the City] could




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acquire the requisite capabilities through contracts with GBRA” and found that the City could provide adequate service through contracts with GBRA and had a more reliable long-term water supply. The Commission approved the City’s application and denied BexarMet’s. BexarMet sought judicial review, and the trial court affirmed the Commission’s order. The court of appeals affirmed, holding that a city that lacks internal capability to provide adequate water supplies may contract with a river authority and thereby acquire the necessary capabilities. The court held that the statute requires a city to possess certain capabilities but does not require the city to own the necessary facilities. The court held that there was substantial evidence to support the Commission’s conclusion that the City possessed the necessary capabilities to provide water service and that the City/GBRA application met the requirements of the water code. Substantial evidence supported agency’s decision to deny unemployment benefits. Palmer v. Shaw, No. 05-04-00941-CV, 2006 Tex. App. LEXIS 817 (Tex. App.—Dallas Feb. 1, 2006, mot. for ext. pet. filed) (mem. op.). Shaw sought unemployment benefits after leaving Palmer’s employ. TWC concluded that Shaw had left her employment voluntarily and denied her application. Shaw appealed, and the trial court reversed TWC’s decision, finding in Shaw’s favor. The court of appeals reversed, holding that Shaw had the burden of showing that TWC’s decision was not supported by substantial evidence. The reviewing court considers only the reasonableness of the agency’s order, not its correctness. There was conflicting evidence as to whether Shaw left voluntarily, and therefore there was substantial evidence to support TWC’s decision to deny benefits. VII. Insurance Substantial evidence supported Commissioner’s decision, and pre-denial hearing is not required; post-denial hearing adequately protects applicant’s due process rights. Stark v. Geeslin, No. 03-05-00411-CV, 2006 Tex. App. LEXIS 5845 (Tex. App.—Austin July 7, 2006, no pet. h.). In an appeal of the Insurance Commissioner’s denial of an application to purchase a domestic insurance company, the court of appeals held that procedural due process did not require notice and a hearing prior to the denial of the application. A post-denial hearing was adequate to protect the applicant’s rights. The court also deferred to the agency’s interpretation of its own rules finding that the 60-day deadline for action on an application did not apply to an incomplete application. Holding that substantial evidence supported the Commissioner’s determination

that the application was incomplete, the court of appeals affirmed. TDI’s rule requiring insurance companies to rebate reinsurance surpluses to their policyholders was valid. Liberty Mut. Ins. Co. v. Texas Dep’t of Ins., 187 S.W.3d 808 (Tex. App.—Austin 2006, pet. filed). A state-created system providing workers compensation insurance to individuals unable to obtain private coverage experienced large deficits, and insurance companies were required to cover the deficit. They asked TDI to allow them to pass this deficit onto their policyholders, and TDI promulgated three emergency rules in 1991 allowing for such passage. In 1992, the legislature enacted section 4.04 of the insurance code, which authorized insurance companies to pass surpluses or deficits to their policyholders. When the system began experiencing unexpected surpluses rather than deficits, some insurers still sought contributions from its policyholders for a non-existent deficit. In 1997, TDI ordered insurers not to seek contribution and to rebate portions of the surpluses.

Liberty and other insurers sued TDI, seeking a declaration that the 1997 rule was invalid, and policyholders sought a contrary declaration that the order was valid. The insurance companies argued that TDI had deprived them of their contractual rights, deprived them of property without due process of law, and violated the prohibition against retroactive laws. The parties all moved for summary judgment, and the trial court denied the insurance companies’ motion and granted the no-evidence motions of TDI and the policyholders. The court of appeals affirmed, concluding that the insurers had no vested right to retain the surpluses and did not have a reasonable expectation that they would be entitled to retain the surpluses, that there was no substantial impairment to their contractual rights, and that the 1997 rule serves a legitimate public purpose and does not affect a fundamental right. VIII. Tax Plaintiffs challenging tax on their travel trailers could not be joined in class action and were required to exhaust administrative remedies. Cameron Appraisal Dist. v. Rourk, No. 04-0359, 2006 Tex. LEXIS 504 (Tex. July 21, 2006) (per curiam). Supreme Court reversed court of appeals in challenge to tax on travel trailers. The Court held that all plaintiffs requesting that the assessment on their trailers be set aside must exhaust their administrative remedies under the Tax Code and that they could not be joined in a class action. Taxpayer’s appearance and participation in tax protest hearing waived complaint about lack of notice of cancellation of exemption. Harris County Appraisal Dist. v. Pasadena Prop., LP, No. 11-05-



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00013-CV, 2006 Tex. App. LEXIS 5077 (Tex. App.—Eastland June 15, 2006, no pet. h.) (mot. for ext. pet. filed). Appraiser canceled pollution exemption without notice to taxpayer, contrary to statutory notice requirement. Taxpayer protested after receiving valuation notice, which revealed cancellation of exemption. Appraisal district denied challenge to cancellation of exemption, but lowered tax value. Trial court found that lack of notice rendered cancellation of exemption void. Trial court ordered refund of taxes paid. Court of appeals held that lack of notice rendered the cancellation voidable, not void. Protest hearing afforded taxpayer opportunity to be heard. Taxpayer waived notice complaint by protesting exemption removal. Court reversed and remanded for hearing on whether exemption should have been removed. Award of attorney’s fees under section 42.29 of the tax code is discretionary. Aaron Rents, Inc. v. Travis Cent. Appraisal Dist., No. 03-05-00171-CV, 2006 Tex. App. LEXIS 2247 (Tex. App.—Austin Mar. 23, 2006, no pet. h.) (mem. op.) (mot. for reh’g en banc pending). After Aaron Rents won its tax protest, it sought attorney’s fees under the tax code and the UDJA. The majority of the court of appeals affirmed, holding that (1) the declaratory relief sought by Aaron Rents was redundant to that sought in the tax protest; and (2) that section 42.29 of the tax code did not mandate an award of attorney’s fees, but instead left such an award to the trial court’s discretion. Section 42.29 provides that a prevailing property owner “may be awarded” attorney’s fees. Tex. Tax. Code Ann. § 42.29(a).

The majority held that the plain meaning of the words “may be awarded” vests the trial court with discretion, looking for support to Bocquet v. Herring, 972 S.W.2d 19 (Tex. 1998) (phrase “a court may award” gave trial court discretion to grant attorney’s fees, while language providing that party “shall be awarded” or “is entitled to” makes award mandatory). Justice Puryear dissented, arguing that the Bocquet distinction requires a determination of whether the statute addresses what the litigant may receive or what the court may award. Justice Puryear argued that the phrasing in the statute was the “functional equivalent” of the mandatory phrasing, “a party may recover.” Taxing authorities did not present evidence sufficient to give rise to presumption that the defendant owned the property in question. Pete Dominguez Enters., Inc. v. County of Dallas, 188 S.W.3d 385 (Tex. App.—Dallas 2006, no pet.). The taxing authorities sued Pete Dominguez Enterprises, Inc. for back property taxes. PDE answered with a general denial. At trial, the taxing authorities offered as their only evidence a certified copy of a property tax notice, which contained the same information as the delinquent tax statement, except with updated

amounts owed. The notice identified the property owner as “Pete Dominquez.” PDE argued that the notice named a different person or entity, but the trial court found in favor of the taxing authorities. The court of appeals reversed, holding that the notice presented by the authorities did not give rise to the statutory presumption in their favor. See Tex. Tax. Code Ann. § 33.47. Because the entity named on the notice is not the same as the sued entity, no presumption arose. Assurances by the authorities’ attorneys that Pete Dominguez was the principal of PDE were not evidence. Taxing authorities did not exhaust their administrative remedies before filing suit. Jim Wells County v. El Paso Prod. Oil & Gas Co., 189 S.W.3d 861 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). Taxing authorities sued defendant oil companies for fraud arising out of a scheme to undervalue oil and gas reserves for ad valorem tax purposes. The trial court granted the oil companies’ plea to the jurisdiction on grounds that the taxing authorities had not exhausted administrative remedies before filing suit. The court of appeals affirmed, noting that In re ExxonMobile Corp., 153 S.W.3d 605 (Tex. App.—Amarillo 2004, orig. proceeding) involved almost identical facts. The court held that the taxing authorities have no common-law right to tax and may do so only by virtue of its state-delegated authority. Without a common-law right to tax, the authorities have no common-law right to sue for an alleged loss in tax revenues. The court held that the authorities’ suit improperly sought to substitute a court’s determination of market value for the appraisal districts’ determinations. The authorities could have challenged the property valuations and petitioned the appraisal districts to void the original appraisals and back-appraise the properties. The court held that the authorities may not avoid the remedies set out in the tax code by “characterizing a statutory tax case as a common law fraud case.” Earned surplus throwback tax, as applied, unconstitutionally burdens interstate commerce. Home Interiors & Gifts, Inc. v. Strayhorn, 175 S.W.3d 856 (Tex. App.—Austin 2005, pet. filed) (op. on reh’g). Home Interiors sought a refund of a portion of its Texas franchise taxes, arguing that the application of the earned surplus throwback provision caused the franchise tax to (1) be unfairly apportioned, (2) discriminate against interstate commerce, and (3) be unfairly related to services provided by Texas. The majority held that the franchise tax as applied to Home Interiors lacked internal consistency because it would impose a tax on an interstate corporation that would never be borne by an intrastate corporation and thus was unfairly apportioned. The Court rendered judgment that the tax was unconstitutional as applied










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to Home Interiors. Justice Pemberton joined in the majority’s opinion except for the portion expressing dissatisfaction with the internal consistency test. IX. Workers’ Compensation Company barred from seeking reimbursement under TWCA for voluntary worker’s compensation payments made when employee elects recovery under Alabama system. Texas Mut. Ins. Co. v. Sonic Sys. Int’l, Inc., Nos. 14-05-00111-CV, -770-CV, 2006 Tex. App. LEXIS 4901 (Tex. App.—Houston [14th Dist.] June 8, 2006, no pet. h.). This opinion concerns two suits filed by Sonic Systems against its worker’s compensation carrier: 1) for reimbursement for voluntary payments made to Sonic’s employee injured in Alabama, and 2) for breach of contract. Both arise from Texas Mutual’s denial of worker’s compensation benefits to the injured worker. The worker’s compensation commission held that the employee’s election to recover under the Alabama compensation statute rendered the Texas reimbursement provisions inapplicable. Sonic appealed that decision, and separately sought a writ of mandamus ordering the trial court to lift the abatement of its contract claims. The trial court reversed the commission’s decision and ordered Sonic reimbursed for its voluntary payments. The court of appeals reinstated the commission’s order, concluding that Sonic’s claim for reimbursement under the TWCA failed to survive the employee’s election to pursue and recover remedies under Alabama’s workers’ compensation laws. The company could recover only as a subclaimant for amounts payable under the TWCA. Because the employee’s election to recover under Alabama law barred his recovery under the TWCA, Sonic was barred from recovery under the TWCA. The court also holds that the trial court’s continued abatement of Sonic’s contract claims was improper because the claims were discrete from the issues still alive in the compensation cause of action; the court conditionally grants Sonic’s petition for writ of mandamus. Stepson who, at the time of stepfather’s death, was a minor and was financially dependent on stepfather, satisfied labor code’s definition of “minor child” as to be entitled to death benefits until age 18, or age 25 if enrolled in qualifying school. TPCIGA v. Morrison, No. 03-05-00309-CV, 2006 Tex. App. LEXIS 4124 (Tex. App.—Austin May 12, 2006, pet. filed). This case regards what benefits various classes of minor children are entitled to receive upon the death of an employee-parent under the labor code. Eric Ford was the minor, dependent stepson of Wayne Darlington at the time of his death. The Texas Workers’ Compensation Commission (now a division of the Department of Insurance) ruled that Eric was only entitled to death benefits for 364 weeks.

The trial court reversed, granting summary judgment in Morrison’s favor. The appellate court affirmed, concluding that Eric was entitled to receive benefits until age 18, or 25 if enrolled in a school satisfying the requirements of § 408.183(d). The statutory definition of “child” includes stepchildren who are financially dependent on the deceased employee, in addition to biological and adopted children. An “eligible child” of a deceased employee is: a minor; enrolled as a full-time student in an accredited educational institution and is less than 25 years of age; or a dependent of the deceased employee at the time of the employee’s death. The court held that, based on his status as Darlington’s dependent stepson, Eric was a “minor child,” and thus he was entitled to benefits until age 18 or, if enrolled in a qualifying school, age 25, rather than the Commission’s award of mere 364 weeks of benefits. The court noted that nothing in the statute’s language “suggest[s] that a dependent stepchild [] should be treated differently than any other ‘child’ who is eligible for death benefits.” The court further noted that the three categories of children represented by § 408.182(f)(1)(A), (B), and (C) are “exclusive,” not overlapping, sets of eligibility. Finally, the court noted that its holding did not render meaningless the category of benefits in § 408.183(e); it simply confined that category’s application to non-minor, dependent children. Judgment signed without the Division receiving notice as required by the labor code was void, but final; second judgment signed outside trial court’s plenary power running from first judgment was also void. Newsom v. Ballinger Indep. Sch. Dist., No. 03-05-00482-CV, 2006 Tex. App. LEXIS 3520 (Tex. App.—Austin Apr. 28, 2006, no pet.). Newsom sought benefits after his wife was killed on the way to her BISD job. The Division of Workers’ Compensation and an appeals panel concluded that Newsom was entitled to benefits, and BISD sought judicial review and moved for summary judgment on grounds that Newsom’s wife’s death was not compensable. On April 5, 2005, the trial court granted BISD’s motion and rendered a judgment reversing the award of benefits. Newsom filed a motion for new trial, which was overruled by operation of law on June 20. He timely filed a notice of appeal on July 18. On July 13, BISD realized it had not filed the proposed judgment with the Division more than 30 days before it was signed, as required by the labor code (a judgment entered without complying with that requirement is void). BISD asked the trial court to sign a second judgment, but did not ask to have the first set aside as void. The Division intervened to contest trial court’s jurisdiction, arguing that the first judgment was a final disposition, that the trial court’s plenary power had expired, and that the


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court lacked jurisdiction to sign a second judgment. The trial court held a hearing and on August 31 signed a second judgment identical to the first except for the date of signing. Newsom and the Division appealed and the court of appeals held that because the first summary judgment was not attacked as or declared void, the trial court’s plenary power expired on July 19, before it signed the second judgment; a “judgment can become final even if it is void.” The court held that the second judgment was signed outside of the trial court’s plenary power and thus was void. The court further held that because BISD did not comply with the labor code’s notice requirement, the first judgment, from which Newsom timely appealed, was also void. The court dismissed the parties’ appeals from both judgments. No error on the face of the record where workers’ compensation claimant did not explicitly state that his deadline to file suit ran from date he received appeals panel’s decision, rather than date decision was filed, and the record does not show the filing date. Insurance Co. of the State of Penn. v. Flores, No. 14-05-00346-CV, 2006 Tex. App. LEXIS 3659 (Tex. App.—Houston [14th Dist.] Apr. 27, 2006, no pet. h.) (mot. for reh’g pending). Flores was injured at work; ICSP was his employer’s insurer. The Division of Workers’ Compensation denied Flores’s request for coverage for neck surgery. An IRO also denied his claim, and an appeals panel upheld that decision. Flores then appealed the panel’s decision to the trial court, naming ICSP as a defendant. After ICSP failed to answer Flores’s petition, respond to his motion for a default judgment, or attend the hearing, the trial court signed a default judgment against ICSP. ICSP brought a restricted appeal, complaining that Flores misrepresented that his deadline to sue started running when he received the panel’s decision, rather than when it was filed. The court of appeals affirmed, holding that: (1) the record did not establish when the panel’s decision was filed, only when it was dated and when Flores received it; (2) Flores did not make an explicit representation that his time to file suit began when he received the decision; and (3) even if he had made that misstatement, there was no showing that the trial court relied on it. The court further held that there was no apparent requirement for Flores to attach the panel’s decision to his petition, and his failure to do so did not amount to error on the face of the record. Trial court lacked jurisdiction to issue injunction when agency acted within its legislatively granted authority and complied with its own rules in making its determination. Texas Workers’ Comp. Comm’n v. Horton, 187 S.W.3d 282 (Tex. App.—Beaumont 2006, no pet.). Horton sought a temporary injunction barring TWC from removing

his doctor from TWC’s list of authorized providers. The trial court granted a temporary injunction, but the court of appeals reversed, holding that the trial court was without jurisdiction to issue the injunction. The court held that there was no evidence that TWC acted unlawfully in its decision. Instead, the legislature granted TWC discretion to remove doctors from its approved-provider list, and TWC acted within its rules in deciding to remove the doctor. Horton did not allege constitutional violations, and TWC acted within its legal authority in removing the doctor from the list. Therefore, the trial court lacked jurisdiction to issue the injunction. X. Workforce Commission Workforce Commission’s award of unemployment benefits was affirmed; no evidentiary errors were committed by trial court. Shioleno Indus., Inc. v. Texas Workforce Comm’n, No. 02-05-00227-CV, 2006 Tex. App. LEXIS 4556 (Tex. App.—Fort Worth May 25, 2006, no pet.) (mem. op.). Shioleno appealed from the trial court’s judgment affirming the Commission’s administrative decision to award unemployment benefits to Tommy Stroman. Based on a substantial evidence review, the appellate court affirmed, holding that (1) the trial court properly excluded evidence that Stroman tested positive for narcotics immediately following his workplace accident because the evidence had not been presented at the Commission hearing, and (2) the trial court did not improperly ignore evidence that Stroman had signed an “employee warning notice” on the day he was fired for violating safety codes because the evidence was not so compelling as to render the Commission’s decision arbitrary or unreasonable. Workforce Commission’s denial of unemployment benefits was affirmed; there was no error regarding necessary parties, substantial evidence, due process, or arbitrary and capricious conclusions. Mendicino v. Texas Workforce Comm’n, No. 03-05-00054-CV, 2006 Tex. App. LEXIS 4323 (Tex. App.—Austin May 19, 2006, pet. filed) (mem. op.). Mendicino was terminated for using his personal e-mail account for company business. He appealed from the trial court’s grant of summary judgment upholding the Commission’s denials of Mendicino’s claims for unemployment benefits. Conducting a substantial evidence review, the appellate court affirmed, holding first that there was no harmful error in the absence of representatives from his former employer(s) at the hearing. The court held that the former employers were not necessary parties because the record showed a different company to be Mendicino’s former employer. That named former employer and the Commission were the only necessary defendants at the trial de novo. Even if the absent employers were necessary parties (based on



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their participation before the Commission), their absence did not deprive the trial court of jurisdiction because they had been named as defendants. Second, the trial court’s making of no findings of fact and only one conclusion of law did not require reversal in a substantial evidence review, and the court’s single conclusion—that substantial evidence supported the Commission’s decision—did not show a failure by the trial court to conduct a trial de novo or a conspiracy among the court and Commission. Third, Mendicino’s due process rights were not violated by the Commission’s refusal to issue subpoenas and, even if they were, the provision of due process at the trial court level mitigated any violation at the administrative level. Finally, the Commission’s conclusion that Mendicino’s improper use of his personal e-mail was “misconduct” under the labor code was not arbitrary or capricious. XI. Public Utility Commission In a fuel reconciliation proceeding, the reductions made by Commission to public utility’s requested expenses, incurred under agreement entered as part of settlement with municipal agency, were reasonable and supported by substantial evidence. CenterPoint Energy Houston Elec., LLC v. Public Util. Comm’n, No. 03-05-00565-CV, 2006 Tex. App. LEXIS 4740 (Tex. App.—Austin June 2, 2006, pet. filed). In a fuel-reconciliation proceeding, the Commission disallowed recovery of $67.1 million of CenterPoint’s fuel expenses for “purchased power costs” on the basis that they were not reasonable and necessary. CenterPoint appealed, claiming the Commission’s order was arbitrary and capricious and not supported by substantial evidence. The court of appeals affirmed. A fuel reconciliation proceeding allows a regulated utility to finalize its reasonable and necessary purchase power expenses because these expenses cannot be automatically passed through to customers. The resulting “fixed fuel factor” is periodically adjusted, and the utility has the burden of demonstrating the reasonableness and necessity of its expenses during the reconciliation period. CenterPoint incurred the purchased power costs through a joint operating agreement (“JOA”) with the City Public Service of San Antonio (“CPS”) to serve their combined load. The JOA was entered as a means of CenterPoint settling its litigation with CPS, and CenterPoint contended that the JOA provided fuel savings to itself and CPS. CenterPoint sought to recover $480 million that it paid to CPS under the JOA, $160 million of which represented CPS’s share of the savings under the JOA (90%). At SOAH, the City of Houston intervened, claiming the expenses were unreasonable because CenterPoint should have negotiated a better deal with CPS rather than simply

passing costs along to the customers. The ALJs recommended disallowing recovery of $67.1 million of the $160 million paid by CenterPoint to CPS for its savings. The Commission adopted this portion of the PFD in its final order. The $67.1 million disallowance was based on findings that (1) the 90/10 split of the JOA savings was unfairly disproportionate (the Commission reallocated it to be 67/33); (2) the JOA overestimated the joint benefits attributable to short-term sales (the Commission reduced the expenses by $30.6 million); and (3) the costs of block-power purchases from the ERCOT market were sometimes lower than the costs of operating CenterPoint’s own plants (the Commission reduced the expenses by $16.2 million). CenterPoint challenged these adjustments on appeal, and the court of appeals affirmed. First, regarding the 90/10 split adjustment, the appellate court noted that the “elephant in the room” concerned the JOA’s origins. Although undisputed that it was entered as part of a settlement negotiation, CenterPoint claimed that the JOA was prudent because it passed savings to ratepayers, but the Commission argued that, regardless of any savings, the JOA’s origin was inherently suspect. The court concluded that JOA expenses were not shielded from scrutiny simply because they were incurred under a contract, but that the JOA was not subject to heightened scrutiny simply because it arose from settlement negotiations. The sole issue was whether CenterPoint satisfied its burden of showing that the JOA expenses were “reasonable and necessary.” The court determined that, the JOA is not “prudent” simply because some savings resulted if additional savings were available. CenterPoint did not have to prove that it negotiated the best deal possible, but was required to demonstrate the reasonableness and necessity of the expenses incurred by the JOA’s 90/10 split. CenterPoint failed to carry its burden, and the record supported the Commission’s reallocation to a 67/33 split. With regard to the short-term sales reduction, although CenterPoint showed the reasonableness and necessity of the JOA expenses, the Commission has discretion to resolve disputes concerning the nature of savings, and to weigh the credibility of the various witnesses, and substantial evidence supported the adjustment. Finally, regarding the reduction for block-power purchases, the court found substantial evidence to uphold the Commission’s adjustment. The court noted that CenterPoint had acted imprudently because “although CenterPoint would not have known the precise amount of benefit that it could anticipate by purchasing energy in the ERCOT market, the utility could have foreseen some increase in transactions.”


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Public Utility Commission Rule allowed recovery by public utility of construction expenses billed to subdivision more than six months after they were incurred. Double Diamond, Inc., v. Hilco Elec. Coop., Inc., No. 10-05-00264-CV, 2006 Tex. App. LEXIS 4433 (Tex. App.—Waco May 24, 2006, pet. filed). Hilco sued Double Diamond to collect expenses related to electrical line extensions constructed by Hilco in Double Diamond’s subdivision. After a jury trial, the trial court entered a judgment awarding damages to Hilco. Double Diamond appealed, urging that § 25.28 of the Public Utility Commission’s Rules bared Hilco’s recovery. Interpreting the administrative rule de novo, the court of appeals held that § 25.28 did not bar the utility from recovering for construction services billed more than six months after the services were rendered. PUC properly allowed CenturyTel to charge a toll to ASAP’s customers where ASAP had no local presence in San Marcos area and did not enter into billing agreement. ASAP Paging, Inc. v. Public Util. Comm’n, No. 03-05-00172-CV, 2006 Tex. App. LEXIS 3851 (Tex. App.—Austin May 5, 2006, no pet. h.) (mot. for reh’g pending). In this substantial-evidence appeal, ASAP, a commercial mobile radio service, asserted that CenturyTel was improperly charging its customers a long-distance toll for calls placed to ASAP’s paging and internet service provider (ISP) customers. ASAP argued that the paging and ISP calls should be toll-free within an extended local calling service area. ASAP argued that the charge would have an anticompetitive effect, deterring CenturyTel’s customers from calling ASAP’s customers. The PUC found that calls from CenturyTel in San Marcos to ASAP paging and ISP customers were properly charged a long-distance toll, and the district court affirmed. The court of appeals affirmed, holding: (1) the PUC’s requirement of geographic proximity for inclusion in an extended local calling service area (as opposed to being based on an area code and the first three digits of an assigned phone number) was not plainly erroneous; (2) there was substantial evidence that the calls were not entitled to inclusion in an extended local calling service area; (3) CenturyTel did not violate its tariffs by not charging a similar toll to Verizon or SWBT customers in the area because those companies have local physical facilities within the extended local calling service area, whereas all of ASAP’s calls are routed through Austin, which is outside the extended local calling service area, and ASAP could receive the same treatment by establishing facilities in the area or entering into billing agreements; and (5) ASAP’s internet service is not merely incidental to its commercial mobile radio service and is properly subject to regulation by the PUC.

Railroad Commission’s decision was not supported by the evidence and was rate-making, not rule-making proceeding. CenterPoint Energy Entex v. Railroad Comm’n, No. 03-04-00688-CV, 2006 Tex. App. LEXIS 3518 (Tex. App.—Austin Apr. 28, 2006, no pet.). The Commission refused CenterPoint’s request to charge customers living outside Houston-area municipalities a share of franchise fees it paid to the Houston-area municipalities for use of municipal land and services. The Commission denied the request, and the trial court affirmed the Commission’s decision. CenterPoint appealed, arguing that the Commission’s decision was not supported by substantial evidence and unreasonably discriminated within customer classes, and the court of appeals reversed The court of appeals held that CenterPoint had standing to contest the Commission’s decision because it may not be able to recover all of the fees charged by the municipalities from the municipal customers and it may put CenterPoint at a disadvantage in the market for municipal customers. The court went on to hold that the Commission’s decision was not supported by substantial evidence. The Commission did not cite to any facts in support of its decision and, in fact, the uncontroverted evidence was that non-municipal customers benefited from the payment of the municipal fees. The court determined that the Commission’s decision was purely rate-making and not ad hoc rulemaking, but under either standard of review, the outcome would be the same. Neither PUC nor FERC had exclusive jurisdiction over price-gouging suit, and “unnamed co-conspirator” who intervened as a defendant in price-gouging suit had a justiciable interest in suit. Jenkins v. Entergy Corp., 187 S.W.3d 785 (Tex. App.—Corpus Christi 2006, pet. filed). Jenkins sued Entergy and others for price-gouging, alleging that EGSI was an “unnamed co-conspirator.” Jenkins alleged that Entergy and EGSI worked together to buy more expensive power from within the Entergy system, rather than cheaper, non-Entergy power. EGSI intervened, and Entergy filed a motion to dismiss, arguing that Jenkins’s suit was preempted by the PUC and the Federal Energy Regulatory Commission (FERC). Jenkins opposed EGSI’s intervention and argued that the suit was not preempted by FERC law. The trial court denied the motion to strike the intervention and granted the motion to dismiss, finding it lacked jurisdiction. The court of appeals held that the trial court did not err in allowing EGSI’s intervention because Jenkins alleged that EGSI was a full partner in the wrongdoing, not a peripheral participant, and therefore had a justiciable interest in the suit. The court further held that neither the PUC nor FERC had exclusive jurisdiction over the subject matter,



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although FERC jurisdiction could “potentially expand to encompass this dispute.” In deciding “price to beat,” Commission acted within its authority in determining what expenses could be considered; substantial evidence supported most, but not all, of its decisions. Office of Pub. Util. Counsel v. Public Util. Comm’n, 185 S.W.3d 555 (Tex. App.—Austin 2006, pet. filed) (op. on reh’g). Due to deregulation, retail electric providers affiliated with the former integrated, regulated utilities were required to sell electricity at a discounted rate called the “price to beat.” On appeal, the parties argue about the fuel factor component of the price to beat. Specifically, the parties contest whether expenses sought by certain utilities were reasonable estimates of projected fuel expenses, due to alleged prices dropping after the initial application process began, and whether procedural irregularities tainted the determinations. The court of appeals concluded that the Commission was within its authority to conclude certain expenses were eligible to be considered in setting fuel factors and that there was substantial evidence to support the Commission’s coal price estimates, purchased power estimates, railroad and depreciation costs. However, the court determined that there was not substantial evidence for the Commission’s inclusion of a uniform system wide unaccounted for energy expense. As for the procedural challenges, the court held that two commissioners were not required to recuse themselves, despite. among other things, not having revealed prior employment history and meetings and telephone conversations with Enron, because there was no showing that the contacts reasonably called their impartiality into question or that the alleged bias amounted to a denial of due process. The court held that OPC failed to show it was harmed by the denial or exclusion of evidence regarding purchased power or that OPC, the Steering Committee, and Cities were treated differently than other ratepayers. XII. Water Contested case hearing required for permit amendment only if Commission cannot determine permit’s impact on water rights from facial review. City of Marshall v. City of Uncertain, No. 03-1111, 2006 Tex. LEXIS 526 (Tex. June 9, 2006) (mot. for reh’g pending). In this dispute over the City of Marshall’s attempt to amend its water-rights permit, the Supreme Court held that a contested case hearing on an amendment is necessary only if the Commission cannot determine “an amendment’s impact on other water rights and the on-stream environment, including the issues of habitat mitigation, water-quality effects, estuarine considerations, and in-stream uses . . . from a facial review of the permit application.” Id. at * 12.

This case is also significant for the detailed history of water law contained in the Court’s opinion. See id. at *3-4. SOS had standing to challenge creation of MUD, water code’s limits on challenges to water districts do not apply to districts created by a special act, and MUD did not show that SOS acted in bad faith so as to warrant sanctions. Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist., No. 06-05-00058-CV, 2006 Tex. App. LEXIS 4656, 2006 Tex. App. LEXIS 6185 (Tex. App.—Texarkana June 1, 2006 (op.) & July 18, 2006 (op. on reh’g), no pet. h.). In this constitutional challenge to the creation of a municipal utility district, the court of appeals affirmed the trial court’s holding that the district was constitutional and its award of attorney’s fees. See id. at *18 (op. on reh’g). However, the court of appeals reversed the trial court’s finding that SOS lacked standing to challenge the creation of the MUD because (1) a quo warranto proceeding was not required to assert that an act is void and (2) the water code’s limitation of challenges to the existence of a water district to suits by the Attorney General was held not to apply to districts created by a special act of the legislature. See id. at *5. The court of appeals also held that the trial court abused its discretion by imposing sanctions against SOS’s attorney because Lazy Nine’s evidence did not overcome the presumption of good faith. See id. at *13. Consent requirement of water code § 62.106(d) is not jurisdictional and is not a proper subject for a plea to jurisdiction, and appellate court lacked jurisdiction to consider an interlocutory appeal of the issue. City of Seabrook v. Port of Houston Auth., No. 01-04-00925-CV, 2006 Tex. App. LEXIS 4314 (Tex. App.—Houston [1st Dist.] May 18, 2006, pet. filed) (en banc). The Port of Houston filed a condemnation proceeding to acquire property in the City of Seabrook. The property owner objected to the initial award, thereby transforming the administrative proceedings into judicial proceedings. Seabrook intervened, the Port moved to strike the intervention, and the trial court overruled the Port’s motion. Seabrook filed a plea to the jurisdiction, arguing that the trial court lacked subject-matter jurisdiction because water code § 62.106(d) requires its consent to the condemnation. The trial court overruled the plea, and Seabrook appealed. The majority of the court of appeals first determined that § 62.106(d)’s consent requirement was not jurisdictional, basing its determination on the “strong preference for finality of judgments” and holding that not all statutory prerequisites should be considered jurisdictional, especially in cases like this one, involving real property interests, which rely heavily upon finality of determinations. The language of the statute suggested that the legislature did not




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intend it to be jurisdictional because there is no consequence for a failure to comply, no independent cause of action or other relief for a city that did not have an opportunity to consent, and nothing in the legislative history shows an intent to make the consent requirement jurisdictional. Further, the statute does not meet the supreme court’s test for jurisdictional requirements of “defining, enlarging, or restricting the class of causes of action the court may decide or the relief the court may award,” nor was it necessary to interpret the requirement as jurisdictional to protect the interests of local government because the City was able to intervene. Because interlocutory appeal cannot be taken from the denial of a plea to the jurisdiction that does not raise a jurisdictional issue, the court dismissed the appeal for want of subject-matter jurisdiction. The dissent would have reversed the trial court’s denial and dismissed the Port’s condemnation proceeding. The dissent believed § 62.106(d)’s consent requirement was jurisdictional because Seabrook has a sovereign right to deny consent to the Port’s condemnation of property within Seabrook’s boundaries. XIII. Miscellaneous Early stages of condemnation proceedings are administrative in nature. City of Tyler v. Beck, No. 04-0813, 2006 Tex. LEXIS 627 (Tex. June 30, 2006) (per curiam). The Supreme Court held that a condemnation proceeding is administrative in nature “[f]rom the time the condemnor files the original statement seeking condemnation up to the time of the Special Commissioners’ award.” Thus service of citation is required only upon the filing of objections to the Special Commissioners’ award. However, in this case the parties waived any objection to lack of service by filing their own objections to the award. See also Pizzitola v. Houston Indep. Sch. Dist., No. 13-05-00249-CV, 2006 Tex. App. LEXIS 4369 (Tex. App.—Corpus Christi May 18, 2006, no pet.) (district’s initial condemnation proceeding was administrative in nature, then transformed to a judicial proceeding). Supreme court not bound by “law of the case” established by earlier court of appeals opinion that was not reviewed by the supreme court. City of Houston v. Jackson, 192 S.W.3d 764 (Tex. 2006). The Supreme Court interpreted the statute regarding employment grievances by firefighters and police officers to limit the instances in which a penalty may be imposed on a municipality for failing to implement the decision of a civil service commission. This case is more significant for the Supreme Court’s discussion of law of the case: “the ‘law of the case’ doctrine in no way prevents this Court from considering legal

questions that are properly before us for the first time.” Statewide rules are not field rules. ConocoPhilips Co. v. Ramirez, No. 04-05-00488-CV, 2006 Tex. App. LEXIS 5710 (Tex. App.—San Antonio June 28, 2006, no pet. h.) (mem. op.). Parties disputed how much acreage was retained within lease after the expiration of primary term based on interaction of new statewide rules and paragraph 18 of lease contract. Paragraph 18 provided that, at the end of five years after the expiration of the primary term, the lessee was entitled to hold 640 acres for each gas well drilled below 5,000 feet unless the Railroad Commission has “adopted” a rule “for” the field in which the gas well is drilled; if the Railroad Commission has “adopted” a rule “for” a field, the lessee is entitled to the acreage specified in that rule. Lessor argued for application of statewide rules that would limit the acreage retained by the lessor to 40 acres. 16 Tex. Admin. Code §§ 3.37(b), .38(b)(1) (2006) (Tex.R.R. Comm’n, Statewide Spacing Rule). Court of appeals rejects contention that statewide rules were field rules even though they applied to this field. Court distinguishes statewide rules from field rules that apply only to a particular field, and holds that contract provision is triggered only by field rules. Because statewide rules were not “adopted” “for” this field, they were not field rules and did not trigger paragraph 18 and change the amount of land held under the lease. Agency did not abuse discretion by considering radar evidence as part of determination of whether officer had probable cause to stop driver for speeding. Texas Dep’t of Pub. Safety v. Ricks, No. 13-04-00597-CV, 2006 Tex. App. LEXIS 5334 (Tex. App.—Corpus Christi June 22, 2006, no pet. h.) (mem. op.). Agency suspended driver’s license based on refusal to submit breath sample following stop for speeding which led to observation of indicia of intoxication. Hearing examiner considered officer’s report, which included radar “clocking” of Ricks driving 61 mph in a 35 mph zone. Ricks appealed, contending ALJ erred by admitting radar evidence because it was not shown scientifically reliable. County court reversed suspension. Court of appeals reversed. ALJ admitted officer’s report without objection. Report included officer’s statements that he saw Ricks speeding and listing radar evidence. Because these observations, together with rational inferences could reasonably have led Officer Cavasos to believe that Ricks was speeding and properly admitted evidence showed stop was justified, county court erred by finding lack of substantial evidence. Police do not need probable cause to approach driver who stops car without prompting. Texas



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Dep’t of Pub. Safety v. Svoboda, 04-05-00796-CV, 2006 Tex. App. LEXIS 5266 (Tex. App.—San Antonio June 21, 2006, pet. filed) (mem. op.). Agency suspended driver’s license based on refusal to submit breath sample following field sobriety tests. Trial court reversed suspension, finding that officers lacked probable cause to stop driver. Court of appeals reversed and rendered judgment reinstating suspension. Court held that initial contact was not a “stop.” Driver, observed driving 20 mph below speed limit late at night, pulled over to the side without any prompting by police. Officers, concerned for his welfare, stopped behind him, activated lights but not sirens, and approached the vehicle to determine if he needed assistance. Court upheld this as community caretaking function. Officers’ subsequent observations of driver provided substantial evidence that probable cause existed to support arrest and, consequently, the license suspension. Statistical information regarding abuse and investigations thereof at individual institutions not exempted from disclosure by HIPAA. Abbott v. Texas Dep’t of Mental Health & Mental Retardation, No. 03-04-00743-CV, 2006 Tex. App. LEXIS 5165 (Tex. App.—Austin June 16, 2006, no pet. h.) (mot. for reh’g pending). In response to reporter’s request, MHMR released report including statewide statistics regarding instances and investigation of abuse at state hospitals and facilities, but declined to release statistics for individual facilities because such would constitute an improper release of individually identifiable health information in violation of Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its Privacy Rule. See Pub.L. 104-191, 110 Stat.1936 (HIPAA codified in various sections of 8, 22, 26, 29 and 42 U.S.C.A.); 45 C.F.R. pts. 160 & 164 (2005) (Privacy Rule). The Attorney General opined that MHMR was required to release the information under the Public Information Act (PIA). The letter concluded that requests for information made under the PIA fall under an exception to nondisclosure found in the Privacy Rule that allows disclosure of health information if it is required by law and if the disclosure complies with the requirements of the law in question. The letter also stated that, although § 552.101 of the PIA prohibits disclosure of information that is considered confidential, the Privacy Rule does not render the information requested in this case confidential, and it is, therefore, subject to disclosure. MHMR sought judicial review, and the trial court ruled that the information was “confidential” and exempt from disclosure under the PIA. The court of appeals concluded that MHMR must release information. The court concluded the PIA is the type of statute that satisfies the “required by law” exception in the Privacy Rule and can compel the

disclosure of health information. Thus, unless there is an exception in the PIA’s disclosure requirement, a state agency must release the requested information to the public. The court set out a general test for determining whether to disclose health-care related information:

1) The agency receiving request for information must examine the information in light of HIPAA and the Privacy Rule to determine if the information is protected health information that is generally not subject to disclosure, such as individually identifiable health information. 2) If the request does not involve protected health information, then HIPAA and the Privacy Rule do not prohibit disclosure of the information. 3) If the request asks for information that is protected health information, then the agency must ascertain if any exception to non-disclosure in the Privacy Rule applies: A) if no exception applies, the agency may release the information if potential identifiers are redacted or if a statistician determines that release of the information cannot be used to identify any individual; B) if an exception does apply, the agency must release the information. For example, if the request is made under the authority of a statute that requires disclosure, then the exception found in 45 C.F.R. § 164.512(a) applies, and the agency must disclose the information as long as the disclosure complies with all relevant requirements of the statute compelling disclosure. The court concluded that no exception to the disclosure requirement of the PIA applies to the release of statistical information regarding reports and investigations of abuse at individual government facilities. Rules governing suits by indigent inmates apply to appeals from administrative decisions. Challenges to disciplinary rulings lengthening confinement must be filed as habeas petitions in federal court. Jones v. Texas Dep’t of Crim. Justice-Corr. Inst. Div., No. 13-05-00197-CV, 2006 Tex. App. LEXIS 5088 (Tex. App.—Corpus Christi June 15, 2006, no pet. h.) (mem. op.); White v. Texas Dep’t of Crim. Justice-Corr. Inst. Div., No. 13-04-00530-CV, 2006 Tex. App. LEXIS 5095 (Tex. App.—Corpus Christi June 15, 2006, no pet. h.) (mem. op.). Trial court dismissed appellants’ claims that they were denied a fair and impartial disciplinary hearing in which they were punished by the loss of good time credit, among other things. The trial court, applying civil practice and remedies code chapter 14, dismissed the suit as frivolous because the court lacked jurisdiction over it. The court of appeals rejected appellants’ assertions that their suits were exempt from chapter 14 and were instead appeals as of right from administrative determinations. The court held that


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these were civil suits like any others and subject to the same rules as all other suits by indigent inmates. The court of appeals found no abuse of discretion in the dismissals because the suits should have been filed as petitions for writs of habeas corpus in the federal system. Appellants argued that their suits did not implicate the duration of their confinement because they were ineligible for release under mandatory supervision laws. But the issue was not how the loss of good time and line classification affect appellants’ mandatory supervision release, but rather that they directly implicated the duration of appellants’ confinement through eligibility for parole release. Because appellants were, in essence, seeking relief for allegedly defective hearings as challenges to the fact and duration of their custody, they had to file their complaints as habeas petitions in the federal system. Correctional Department and district judges were “employers” under TCHRA, but no direct employment relationship existed between County and probation officer. De Santiago v. West Tex. Cmty. Supervision & Corr. Dep’t, No. 08-05-00157-CV, 2006 Tex. App. LEXIS 4946 (Tex. App.—El Paso June 8, 2006, no pet.). De Santiago, a probation officer, filed an employment discrimination suit against the Department and county and district court judges, alleging she was the victim of gender discrimination and retaliation. The county judges and the Department filed pleas to the jurisdiction, claiming the district judges were her employers under the TCHRA, and the district judges moved for summary judgment, asserting judicial immunity. The trial court granted all pleas and the summary judgment. The court of appeals held that the district court judges have ultimate control of the Department’s personnel decisions, and thus were De Santiago’s employers under the TCHRA. The Department is a “state instrumentality” so as to satisfy the definition of “employer,” but the Department is an agent of the district court judges and there was no direct employment relationship between De Santiago and the Department, thus the Department cannot be held liable under the TCHRA. Further, although the county judges also satisfied the definition of employer, De Santiago sued them in their official capacities, meaning she effectively sued the county with which she had no direct employment relationship. Therefore, the trial court properly granted the Department’s and the county judges’ pleas to the jurisdiction. Finally, De Santiago sued the district judges in their official capacities, which meant she effectively sued the district courts and judicial districts, which are not included in the TCHRA’s definition of employer. Therefore, trial court properly granted summary judgment for the district judges.

Plea to the jurisdiction improper vehicle to urge limitations. Dallas County v. Hughes, 189 S.W.3d 886 (Tex. App.—Dallas 2006, pet. filed). Fired county employee filed administrative grievance despite being told and shown that there was no administrative remedy. After being denied administrative relief more than ninety days after being fired, former employee filed Whistleblower action. County filed plea to the jurisdiction asserting suit violated statute of limitations requiring filing of suit within ninety days of alleged violation. The trial court denied the plea, concluding that late filing did not deprive it of jurisdiction. The court of appeals affirmed, opining that summary judgment is the proper vehicle for assertion of defensive pleadings of limitations, not a plea to the jurisdiction. Trial court erred in entering judgment against two affiliated companies not made parties to the suit and in entering judgment based on insufficient evidence and pleadings. Metromedia Rest. Servs., Inc. v. Strayhorn, 188 S.W.3d 282 (Tex. App.—Austin 2006, pet. filed). Metromedia is a wholly owned subsidiary of S&A Restaurant Corp. Metromedia provides office services, including bookkeeping and “paymaster” for certain employee payments. Over time, employee paychecks of another S&A subsidiary would go uncashed. After three years, those wages were delivered to the Comptroller, but S&A improperly withheld a $15 per check “processing fee.” The Comptroller sought the improperly retained wages from Metromedia, asserting that it was the “holder” of the funds. The Comptroller did not seek the funds from S&A or the other subsidiary. Metromedia filed a declaratory judgment action. The Comptroller counterclaimed, but still did not name S&A or the other subsidiary. The jury found that all three entities were holders of the wages and that Metromedia operated as a single business enterprise with the other entities. The trial court entered judgment against all three entities, which then appealed. The court of appeals reversed, holding that the trial court could not enter a judgment against S&A or the other subsidiary because they were not made parties to the lawsuit by the Comptroller. The court further held that there was no evidence that Metromedia was a “holder” of the funds and that the Comptroller did not plead the “single business enterprise” theory sufficient to give Metromedia notice that the Comptroller would seek judgment on that basis. City’s ordinance did not allow property owner to rely on price of land in seeking to extend amortization period. Coyel v. City of Kennedale, No. 02-04-00391-CV, 2006 Tex. App. LEXIS 83 (Tex. App.—Fort Worth Jan. 5, 2006, pet. denied) (mem. op.). After the City annexed land that included





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Coyel’s salvage yard, the City rezoned the land making the salvage yard a nonconforming use. Under a city ordinance, a nonconforming use could continue for three years, called the “amortization period.” Coyel sought an extension of the amortization period, presenting evidence of the money he had invested in the property, including the price of the land. The City denied his application, and he filed suit seeking a declaratory judgment. The trial court granted summary judgment in favor of the City, and Coyel appealed. The court of appeals affirmed, noting that the ordinance allowing an extension required the property owner to show that he had not recouped his investment in the “building or use” over the three-year period. Coyel’s evidence that he had not recouped the price of the land was not a factor the City could consider in deciding whether to grant the extension. Therefore, the evidence showed that the City’s criteria were not arbitrary and summary judgment was proper.

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